Published
Apr 5, 2019
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UK fashion retail has tough March, gift buying moves online

Published
Apr 5, 2019

There was little relief for the UK’s beleaguered retailers during March as shoppers failed to increase their discretionary spending enough. Even the twin boosters provided by Mother's Day and warm spring-like weather didn't ignite sufficient interest in buying non-essentials at physical stores.


Mother's Day gifts boosted UK spending last month but purchasing shifted online



That's according to the latest BDO High Street Sales Tracker (HSST), which said that “a mere 4.8% rise in in-store sales proved dire for high street retailers trying to rebound from a brutal base of -10.1% for March last year.”

There was at least an increase this year. But when you're trying to recover from a 10%+ drop, not even getting halfway there is bad news.

Given that the previous March had been affected by snowstorms that had severely undermined shopping in physical locations (it was the worst month for the high street since the height of 2008’s global recession), we would have expected there to be a bigger recovery this year. But the recovery simply wasn't enough to point to a general return to good health for the sector.

And that was especially so for fashion. On the surface an 8.2% increase looked spectacularly good. But it still didn't make up for the 12.7% fall of the same month last year. 

And in the lifestyle sector, this year's figures didn't even manage to be positive, falling 2.7% after a 4.5% drop a year ago.

But at least online sales continued to increase. They rose 18.7% in March, which was much better than the year before when they rose only 11%. it was a sign of how fast spending is moving to digital channels and the big problem that physical retailers face in trying to adjust to this.

Early in March it hadn't looked like online would be that strong, as e-sales started the month slowly. But they enjoyed a substantial rise in the final week thanks to Mother’s Day spending. And here's another trend that can be seen from the online shift. Consumers are swapping to digital channels for gift purchases in even faster numbers than for general purchases. This was very clear over the Christmas season as well and shows how retailers can no longer rely on key gifting occasions to boost turnover at their physical shops.

Sophie Michael, Head of Retail and Wholesale at BDO LLP, said: “With increased footfall, falling unemployment and rising wages, the stars should have aligned for high street retailers in March. Yet sales remained extremely poor and any positive movement failed to make a dent in the huge negative result we had last year caused by the Beast from the East.

“There has been noise of increases in total consumer spending, but these results only demonstrate that the spending is largely driven as a result of price inflation of weekly essentials with the discretionary purse remaining bare. Retailers continue to trade on paper-thin margins and the impact of further increases in business rates and staffing costs from this April will only add to the fears of further possible high street casualties.”

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