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Significant discounts in the run up to Black Friday failed to rally UK shoppers, resulting in “another disappointing month” for retailers, according to new figures released today by accountancy and business advisory firm BDO.
According to its High Street Sales Tracker, total like-for-like (LFL) sales in November fell by 0.3% compared with last year’s figures.
The month started positively, with LFL sales increasing by +4.7% in week one. However, this was followed by falling sales in weeks two, three and four despite “heavy discounting” from retailers becoming more prevalent.
Online sales were particularly poor throughout the month and down by -0.2% last year. While in-store LFL sales grew, this was not enough to offset the negative online performance.
The fashion sector suffered the greatest drop in November. Total sales declined sharply by -3.6% from a robust base of +8.5% last year.
However, sales in the homeware and lifestyle sectors grew by +5.2% and +2.0% respectively, providing a small but welcome boost to some retailers. Both categories reported growth in in-store and online sales.
Sophie Michael, head of Retail and Wholesale at BDO LLP, said: “The overall figures, and in particular the fashion sector’s poor performance in both store and non-store categories, suggest that Black Friday promotions and discounts alone are not enough to encourage consumer purchases. In fact, such events are merely proving to erode margins further; only collectively can retailers break this cycle.
“With discretionary spend still tight, it looks like consumers may be choosing to spend their budget on one slightly bigger item rather than several less expensive ones, thus bringing overall volumes down.”
She added: “Looking ahead, 2024 will continue to be a challenging period for the sector as business rate rises loom for many and the increase in the National Living Wage adds further pressure to overheads. In the event that consumer spend does pick-up significantly and retailers have a bumper December, it’s unlikely it will be enough to recover the Golden Quarter.”
