The UK retail industry is currently facing a dire situation, as evidenced by the latest High Street Sales Tracker (HSST) by BDO. According to the report, 2018 has been the worst year on record for UK high street stores, with in-store sales in September plummeting by 2.7% year-on-year. The fashion sector, in particular, bore the brunt of the downturn, experiencing a 2.8% drop in sales.
What is perhaps most concerning is that this marks the eighth consecutive month of negative in-store sales and the twelfth month where growth has been below 1% for high street retailers. However, amidst these gloomy statistics, there is a ray of hope in the form of online sales, which saw a healthy growth of 11.6% in September.
The picture painted by the HSST report is not a pretty one, especially for fashion and lifestyle sales, which have seen negative like-for-like sales for 17 out of the last 20 weeks. Homewares fared even worse in September, with a significant 4.4% decline, signaling a lack of consumer confidence in making big-ticket purchases.
Sophie Michael, Head of Retail and Wholesale at BDO LLP, has shed light on the challenging year that retailers have faced and attributed part of the decline to Brexit uncertainty impacting consumer spending. As the crucial Christmas season approaches, the dwindling footfall on the high street is a cause for concern. Michael emphasized the urgent need for innovation in creating engaging shopping experiences to lure customers back to physical stores.
In light of the decline in footfall, it is imperative for retailers to focus on cost control to safeguard their margins in an increasingly competitive market. The prevailing sentiment is that the UK high street is in crisis, and retailers must swiftly adapt to evolving consumer habits and economic uncertainties to stay afloat in today’s challenging retail landscape.
For more insights on the state of the UK retail industry, you can check out BDO’s High Street Sales Tracker report here. Additionally, if you’re interested in learning about strategies for retail innovation, you can explore some helpful tips here.
