Strong November sales mask another fashion fall, outlook “bleak” says BDO
At first glance, November’s UK retail sales released Friday looked quite good. Despite the pandemic-induced lockdown, total like-for-like sales last month increased 3.3%, the strongest month of sales since January, according to the latest BDO High Street Sales Tracker.
It was also the best monthly total like-for-like sales since 2017, albeit boosted by deep discounts and earlier-and-longer-than-usual Black Friday promotions.
But, of course, that 3.3% gain was for stores and online combined. So it doesn’t take much to work out digital sales must have been really impressive. In fact, they more-than-doubled, recording the third strongest month of the year.
With England in lockdown and other parts of the UK also seeing restrictions, as with the previous lockdown, non-store like-for-like sales rose by virtue of becoming the only discretionary channel available to consumers. That handed the sector the largest non-store result since May. Total non-store like-for-like sales leapt 106.3% last month from a base of only +2.8% last year.
And now for the usual bad news. Fashion sales faltered again as they have done for months now. Fashion total like-for-like sales fell 5.7% in November from an already weak base of -1.9% a year ago.
The sector has now suffered nine straight months of negative total comp sales, as the end of the month saw the collapse of several high street giants in the category. Given the latest news on Arcadia, Debenhams and Bonmarché, numbers for the sector can only get worse. No wonder BDO said the outlook for total 2020 retail looked “bleak”.
If there was a bright side, lifestyle and homewares recorded the most positivity, BDO noted. Spurred by Christmas shopping, lifestyle total like-for-likes improved by 17.6% in November, from a poor base of -2.6% for November last year. The result marks the second consecutive month of growth for lifestyle and the best monthly result since September 2017.
Homewares total like-for-likes surged 8.5% from a base of -0.1% for the equivalent month last year. Boosted by work from home orders and lockdown restrictions, the category has performed comparatively well this year. Hence, November marked the seventh straight month of positive results for homewares.
Breaking down the performance figures, November saw rising total like-for-likes from week one, as England settled into a national lockdown, through to the penultimate week of the month, hitting a high of 8.52% in week two. However, the final week, which included Black Friday, saw total like-for-likes fall 3.81% from a base of +22.62% for the equivalent week last year.
Sophie Michael, head of Retail and Wholesale at BDO, said: “Retailers will need to make the most of every opportunity as lockdown lifts and the Christmas trading season reaches its zenith in December.
“While November results were promising, the figures have been heavily impacted by widespread discounting and lockdown’s knock-on effect on in-store sales and strong online demand”.
She added: “As we head into 2021, more store closures are sadly imminent and brands that survive will be those that capitalise on digital channel investment and adapt their store portfolio quickly to changing consumer behaviour. The overall picture for the high street in 2020 looks bleak, but retailers have shown immense resilience, and some have even proven in the most turbulent times there are success stories to be found”.
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