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Despite a strong start to the month, retailers recorded a disappointing end to the Golden Quarter thanks to heightened Covid restrictions and expanding lockdowns, new figures by accountancy and business advisory firm BDO LLP reveal.
According to BDO’s High Street Sales Tracker (HSST), total like-for-like (LFL) sales, combined in-store and online, declined by -1.6% in December, but from a very good base of +6.6% for the same month last year. Inflated non-store sales since the first lockdown in April have provided a boost throughout the year, but failed to lift total sales onto positive ground in December.
Total like-for-like sales have now tallied nine non-consecutive months of negative results in 2020.
Breaking down the figures, BDO revealed December weekly results showed promise at the beginning of the month, but positive signs were “swiftly scuppered” by mid-month Covid restrictions and lockdowns.
Total like-for-like sales increased by +11.22% in the first week of December from a strong base of +22.40% for the same week last year, with both weeks including Cyber Monday. The second week of the month saw total like-for-like sales improve, as well, by +6.42% from a flat base (+0.28%) last year.
With rising Covid cases and further restrictions announced, however, total like-for-like sales then tumbled by -11.15% in week three from a base of -0.37% for the same week last year.
The final week of December, which saw the expansion of a more restrictive Tier system across England, saw total like-for-like sales plummet by -23.18%, but from a base of +6.61% for the same week last year.
Sophie Michael, head of Retail and Wholesale at BDO, said: “Shoppers were ready to spend at the start of December, providing retailers with some much needed Christmas cash. This optimism was scuppered, however, as lockdowns returned across the country, dampening consumer sentiment, with discretionary spend following close behind.
“Early January spending figures suggest shoppers weren’t simply waiting for discounting, but instead stopping discretionary spend altogether as the nation hunkers down for a long winter lockdown.”
She added: “Unlike the November lockdown that had a finite ending with Christmas in sight, the current forecast remains much gloomier for retailers, as they try to hold on until the vaccination programme can reopen the economy, which may leave many with high levels of unsold winter stock.
“It is clear that there are retailers in urgent need of further support to survive this latest lockdown. While there is no doubt that we will see more retail casualties, there will also be those that ride this storm and will find greater opportunities as discretionary spend returns and recovery begins.”
