According to BDO’s High Street Sales Tracker (HSST), UK retailers have just experienced their worst February since 2009, with like-for-like sales dropping 2.2%.
The decline, coming off an already negative base of -1.7% for February 2016, marks the third month in a row of negative growth and the fourth consecutive February with no growth.
Year-on-year fashion sales were down 3.4% in February – the poorest result for the sector since September 2016 (when they dipped 5.9%).
Sales of homewares also fell for the first time since June 2016 – down 1.4% year-on-year – as households tightened their belts against rising prices. Even online sales slowed, growing at just 19.9% in February.
Strong sales of Valentines goods helped the lifestyle sector register weak growth of 0.4% year-on-year for February, but this couldn’t counteract a fall in footfall as the harsh weather hit the UK at the end of the month.
Sophie Michael, Head of Retail and Wholesale at BDO LLP, said the figures laid bare the intense pressure on consumers’ discretionary spending.
“On Wednesday the Chancellor told us growth in the economy was expected to be higher – and borrowing lower – than forecast in November, but that hasn’t translated into consumer spending power,” she said.
“February saw a perfect storm – both figuratively and literally. Doris kept shoppers away from the high street, but the relatively poor growth of online sales in February shows that the economic headwinds significantly curbed spending.
“The majority of retailers’ price hedges ran out at the end of last year, and inflationary cost pressures have forced them to increase prices – sharply in some cases.”
She added: “Retailers, more than ever before, should focus on product, quality, range and service. They should provide a differentiation which encourages and enables their target customer to justify paying full price at a time when the consumer purse will begin to tighten.
“Whilst these cost headwinds are a cause for concern, retailers need to find ways to ride out the storm and look to opportunities relevant to their business, such as exports or international expansion.”