Following the government’s coronavirus lockdown, high street retailers in the UK have unsurprisingly endured their worst month on record.
According to BDO’s High Street Sales Tracker (HSST), total like-for-like sales, combining both in-store and non-store sales, dropped 17.9% in March against a 6.5% increase the same time last year.
In-store like-for-like sales plummeted a record 34.1%. Reduced footfall due to social distancing and isolation, diverted demand from discretionary to essential items, and enforced store closures in the final week of March all contributed to the worst results on record for total in-store like-for-like sales.
Each sector suffered a decline this month. Lifestyle in-store like-for-like sales decreased by 24.6%, while fashion sales plunged 40.4%. Homeware in-store sales declined by 26.1%.
As shoppers turned to e-commerce, non-store like-for-like sales increased by 13.7% in March from a base of +18.7% last year. However, the increase was not consistent across all sectors as fashion retailers experienced a substantial drop in demand across all channels this month, while lifestyle retailers saw good results online.
Sophie Michael, Head of Retail and Wholesale at BDO LLP, commented: “It’s no surprise that March was the worst month on record for the high street, as the COVID-19 outbreak had an immediate impact on consumer demand for discretionary items.
“Understandably, shoppers are being very cautious with their pounds, as concerns about job security grip the nation. For most retailers, in-store sales make up the largest portion of their revenue, so they are having to rely solely on non-store channels and adapt aggressively to survive. It is likely that the pandemic has only sped up the shift away from in-store shopping as consumers become even more accustomed to buying online.”
She added: “It is vital for all retailers to navigate and adapt through the immediate challenges ahead, whilst also starting to consider longer-term strategic planning for the future once the lockdown lifts and normality resumes.
“For now, businesses and consumers will be looking to the government for help and clarity. Although many will welcome the extent of government support provided, most if not all retailers will still carry heavy costs associated with inactive shops. Ultimately, a frank and open dialogue is now needed together with collaboration from all parties to achieve viable outcomes.”
