Skip to main content
BoF Logo

The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.

UK Retail Sales Suffer Worst Year in More Than a Decade

Sales at brick-and-mortar stores fell 1.9 percent in December, capping off the worst year for monthly sales shrinkage since at least 2006, finds to a new report by BDO LLP.
Source: Shutterstock
By
  • Bloomberg

LONDON, United Kingdom — Investors looking for relief from the tumult of global markets may want to avert their eyes from a report showing that by one measure, UK retail sales had their worst year in more than a decade.

Sales at UK brick-and-mortar retail stores fell 1.9 percent in December on a like-for-like basis, according to a report Saturday from business advisers at BDO LLP. That capped off the worst year for monthly sales shrinkage since at least 2006, when the firm began tracking data coming from about 85 British retailers with some 10,000 stores.

As more shoppers head online — and away from physical sites often locked in expensive leases — there’s little escape from the traditional British industry’s decline. Even with strong signs emerging from American retailers’ holiday season and some UK brands, the report provides scant cheer for storied British companies such as Marks & Spencer Group Plc, Debenhams Plc, and Mothercare Plc that are set to publish sales numbers this week.

“The shopping spree retailers were hoping for in December didn’t happen,” said Sophie Michael, BDO’s national head of retail and wholesale. “Shoppers have exercised extreme caution or shopped strategically online, seeking out discounts rather than visiting bricks-and-mortar stores.”

ADVERTISEMENT

While Next Plc’s sales report on Thursday held some positive signs, much of the strength came from online sales; store revenue declined 9.2 percent in the nine weeks ending December 29. Next does about half its business on the internet, more than double the proportion at competitors like Debenhams and Marks & Spencer.

Observers often look to Next to indicate the sector’s performance and “it never, ever does,” said Richard Hyman, an independent retail analyst.

Non-store like-for-like sales rose 12 percent last month, according to BDO, following a continuing shift to online spending. If shoppers didn’t make it out of the house to do much of their Christmas buying, retailers with a weak web presence will be in trouble.

Online peers aren’t immune to the challenges weighing on the industry: fashion retailer Asos Plc last month said that Christmas shopping got off to a disastrous start. Uncertainty about Brexit negotiations has also taken a toll, as British consumer confidence dropped to its lowest level since 2013.

The FTSE 350 General Retailers Index has fallen about 30 percent through Friday since the U.K. voted to leave the European Union in June 2016, compared with a 7.9 percent advance for the FTSE 100 Index during the same period.

Global market volatility and trade tensions also helped shave the forecast of iPhone maker Apple Inc., sending ripples through markets around the world last week. As consumer confidence remains low, there’s little reason for retailers to expect change in 2019, according to Diane Wehrle, marketing and insights director at retail analysis firm Springboard.

”We don’t anticipate much uplift for bricks and mortar unless something changes,” she said in a phone interview. ”It’s the final stage in a long journey toward extinction for some retailers that are out of date.”

By Lisa Pham and William Mathis; editors: Celeste Perri, Eric Pfanner, John Lauerman and Paul Jarvis.

© 2024 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions

More from Retail
Analysis and advice from the front lines of the retail transformation.

Op-Ed | How Long Can Adidas Surf the ‘Terrace’ Trend?

As a push to maximise sales of its popular Samba model starts to weigh on its desirability, the German sportswear giant is betting on other retro sneaker styles to tap surging demand for the 1980s ‘Terrace’ look. But fashion cycles come and go, cautions Andrea Felsted.


How Rent the Runway Came Back From the Brink

The rental platform saw its stock soar last week after predicting it would hit a key profitability metric this year. A new marketing push and more robust inventory are the key to unlocking elusive growth, CEO Jenn Hyman tells BoF.


view more

Subscribe to the BoF Daily Digest

The essential daily round-up of fashion news, analysis, and breaking news alerts.

The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.
CONNECT WITH US ON
The Business of Beauty Global Awards - Deadline 30 April 2024
© 2024 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions, Privacy Policy, Cookie Policy and Accessibility Statement.
The Business of Beauty Global Awards - Deadline 30 April 2024