October sees department stores upturn as cool weather clothing hits the spot
We’ve seen lots of reports in recent weeks about UK retail sales, but on Thursday, the official figures came out and the Office for National Statistics said October sales volumes and value fell by 0.1% month-on-month. But department stores reported growth. And year-on-year sales rose 3.1% by volume and 3.3% by value.
Meanwhile online sales as a proportion of all retailing increased to 19.2% in October 2019, from the 19% reported in September 2019. And the importance of e-sales can be see by the ONS saying that “non-store retailing provided the largest contribution to the year-on-year growth, [while] non-food stores were the smallest contributors to growth.”
But what about that rise in department store sales? The ONS said department stores were up 2% month-on-month by volume and up 0.2% year-on-year. That contrasted with textile, clothing and footwear stores that were down 1% on the month, although they were up 2.6% on the year, which is good in the straightened circumstances of UK fashion retail at the moment.
Department stores actually saw their biggest month-on-month growth since May 2018’s 2.9%, which bucked the general downward trend for the sector. And the year-on-year measure was the first growth since April, following five months of falls.
Feedback from retailers suggested that “increased promotions had boosted performance. There was also evidence of retailers bringing forward the sale of Christmas product lines to earlier in November than in previous years,” the ONS said.
Analyst Lee Lucas, who’s Principal and CEO of the Fashion Retail Academy, said retailers were ready and waiting for any consumers who wanted to ship for festive and winter product early.
“Unseasonably cold weather has delivered an early Christmas present for retailers,” he said. “Shops were ready and waiting with this season's coats, gloves, scarves and hats when last month’s chill arrived, and they capitalised as a drop in temperatures sent shoppers running for the winter racks.
“Christmas decorations weren’t quite out of their boxes but these retailers also appear to have benefited from a growing trend that sees consumers shopping for Christmas presents earlier and earlier every year. With Black Friday on the horizon, businesses will have high hopes of keeping this momentum going over the coming month as sharp-elbowed shoppers fight for the best deals.”
But Andrew Westbrook, head of retail at consultancy RSM said the fact that markdowns were key to sales is a problem. "While sales volumes and values fell in October versus last month, the year-on-year numbers look slightly healthier," he said. "However, these numbers may be masking the deep discounting that many have had to offer to coax shoppers into parting with their money. While this might have helped shift stock, it won't have helped lift already wafer-thin profit margins".
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