The latest report from BDO’s High Street Sales Tracker paints a challenging picture for UK fashion retail in November. Despite extensive Black Friday discounts, the month saw a decline in total like-for-like (LFL) sales by 0.3% year on year. Although the month began with a promising 4.7% increase in LFL sales in the first week, subsequent weeks witnessed a drop in sales even with increased discounting from retailers.
Online sales faced particular difficulties, marking a 0.2% decrease compared to the previous year. While in-store LFL sales showed a positive trend, they couldn’t compensate for the negative online performance.
The fashion sector, in particular, bore the brunt of November’s challenges, suffering a significant drop of 3.6% in total sales compared to the robust 8.5% rise recorded the previous year. This decline in fashion sales was even more glaring considering the growth observed in the homewares and lifestyle sectors (5.2% and 2%, respectively).
Sophie Michael, Head of Retail and Wholesale at BDO LLP, emphasized that Black Friday promotions and discounts alone may not be sufficient to drive consumer purchases. Instead, these events could be eroding profit margins. She suggested that retailers need a collective approach to break this cycle.
With discretionary spending constraints, consumers may be opting for slightly bigger purchases instead of multiple less expensive ones, impacting overall sales volumes. Looking ahead, the report anticipates a challenging period for the sector in 2024, citing business rate rises and increased National Living Wage as additional pressures on overheads. A potential uptick in consumer spending in December may not be enough to fully recover from the November setbacks, signaling a demanding road ahead for UK fashion retailers.
