UK High Street on course for worst year on record
Written by Peter Walker
Figures released today by business advisory firm BDO have revealed that UK High Street sales declined 1.7 per cent year-on-year in June, marking the first time in at least 12 years that in-store growth has failed to exceed one per cent in a single month for the first half of a calendar year.
BDO’s High Street Sales Tracker figures also marked the fifth successive month of negative in-store growth.
The final month in what has been a crippling first half of the year saw negative like-for-like growth in lifestyle goods (-0.3 per cent), fashion (-2.3 per cent) and homewares (-2.4 per cent). Non-store sales grew by 10.4 per cent, the lowest year-on-year increase since December 2015, as retailers struggled to cope with further declines in consumer confidence.
Torrential rain and localised flooding across parts of the UK hurt footfall and sales during the first half of 2018, with overall year-on-year in-store sales plunging by 6.5 per cent in the first week of June.
Week two and three saw sales grow, albeit from a poor base the year before, thanks to a combination of Father’s Day and the World Cup. But the final week ended down by 5.4 per cent year-on-year as the scorching weather made it too hot to shop for many.
Sophie Michael, head of retail and wholesale at BDO, said: “The bleak and crippling start to the year shows no sign of abating, with deep discounting set to eat into margins that are already being stretched paper-thin by poor sales and rising costs, including the much-discussed issue of unfair business rates on high street retailers.
“These numbers confirm what many retailers have already suspected – this has been the worst first half of a calendar year for more than a decade,” she added. “It will take a monumental change in fortunes on the high street to turn 2018 into anything other than an annus horribilis.”
BDO’s findings come just days after the independent review of the UK high street by former Wickes and Iceland chief executive Bill Grimsey, which estimated that 28,000 retail jobs have disappeared in 2018 and a further 40,000 could go by the end of the year.
Michael called those findings worrying and a “huge red flag for businesses and government alike”.
“The retail sector plays a hugely significant part in our economy; in employment, in taxes and in its societal impact on local communities,” she concluded. “It is more important than ever that the government not only steps up, but stands up, for the future of the great British High Street.”