In a notable shift, the BDO High Street Sales Tracker (HSST) has characterized October’s retail landscape as «grim,» signifying a challenging commencement to the Golden Quarter. The report reveals a 1.7% year-on-year decline in like-for-like retail sales, marking a stark contrast to the 3.5% overall sales increase and 5.9% rise in in-store sales seen a year ago. Fashion retailers faced a particularly tough month, with in-store sales plummeting by 2.3%.
The downturn is attributed, in part, to an unusual three-week heatwave conflicting with the arrival of autumn products, such as coats and sweaters. Sophie Michael, Head of Retail and Wholesale at BDO LLP, anticipates heightened discounting in November as retailers prepare for Christmas, participating in events like Black Friday and Cyber Monday. However, she cautions that intensified competition for discretionary spending may necessitate deeper discounts.
As retailers navigate the challenging landscape in the run-up to Christmas, traditionally a peak period, the weaker discretionary spending raises concerns for the industry. With the Golden Quarter crucial for revenue generation, the potential for significant challenges extending into the New Year looms. Businesses, already managing tight profit margins amid high interest rates and energy bills, may face an extended period of economic strain. Stay informed as retailers adapt to the evolving economic landscape in the months ahead.