January proved to be a particularly difficult month for non-essential store-based retailers in the UK, as highlighted by a recent report from BDO. In fact, it was revealed to be the worst January on record for these retailers, a trend that unfortunately followed a disappointing December period. The fashion industry especially faced a grim reality, with their total like-for-like sales marking an 11th consecutive month of decline.
The overall picture painted by the report showed a steep 10% decrease in combined in-store and online like-for-like sales in January compared to the same month the previous year. Interestingly, online sales experienced a significant surge of +132.8% year-on-year, marking a record-breaking increase. This boost in online activity played a crucial role in preventing sales from plummeting even further, particularly given the context of the ongoing COVID-19 pandemic and the restrictions imposed.
Despite the silver lining of increased online sales, the total like-for-like result for January was still the worst since June, pointing to the ongoing struggles faced by retailers. Fashion and lifestyle sectors continued to suffer, with respective sales declines of 12.1% and 16.7%, while homewares managed to maintain a positive growth streak for the ninth month in a row, climbing by 6.7%.
The weekly results echoed the challenging retail landscape seen throughout January, as the impact of the third national lockdown made its mark on total like-for-like sales week by week. As such, retailers are facing an uphill battle as they navigate through uncertain times. Sophie Michael, the head of Retail and Wholesale at BDO, emphasized the importance of laying down a clear roadmap out of lockdown to assist retailers in planning for a sustainable future amidst the changing consumer habits and economic disruptions caused by the pandemic.
For further insights on the current state of the retail industry in the UK, readers can refer to the full report by BDO here. Additionally, retailers looking for strategic guidance during these challenging times can benefit from exploring BDO’s retail advisory services here.
