A month of deep and widespread discounting may have lead bargain-hunters to part with their cash early ahead of the January sales, according to latest figures released by BDO LLP.
The accountancy and business advisory firm’s High Street Sales Tracker (HSST) shows particularly positive like-for-like (LFL) sales in the first and last weeks of the month, with non-store LFLs reflecting the impact of Cyber Monday.
With an additional shopping day at the beginning of Christmas week this year, the final week of December saw in-store sales up by 8.59%. However, despite the boost from extreme discounting, total in-store sales still failed to offset a poor base from December last year, with a marginal increase of 0.7% not giving retailers the final month of the decade they’d hoped for.
Meanwhile, off the high street, non-store like-for-like sales were up by 24.5% as online sales saw the best monthly results since December 2013. With Cyber Monday landing six days later than it did last year, more sustained discounting ultimately defined December sales figures.
The fashion sector suffered in December as in-store sales dropped 2.4% from a poor base of -2.0% last year, dragged down by a significant drop of 9.03% the week before Christmas. This marks the eighth negative December in a row for fashion.
Lifestyle sales however saw growth for the first time since January 2018 with in store sales up by 6.0%, bolstered by strong weeks at the beginning and end of the month (up by 13.25 and 20.08 respectively) as consumers splashed out on Christmas gifts.
Homeware sales continued to improve too, seeing an uplift of 4.2% from an already strong base of +9.3% marking the fourth consecutive month of growth for homewares.
Sophie Michael, Head of Retail and Wholesale at BDO, said: “In terms of retail spending, December has provided a glimmer of hope for the retail sector as we saw positive first and last weeks of the month as well as a good month for lifestyle and homewares.
“However, this was boosted by extreme discounting, which was qualitatively different this year. Black Friday never quite ended and instead saw sales continue throughout the month.”
She added: “January tends to be a positive month as people are more inclined to spend in the sales, however it’ll be interesting this year to see if many have already done their bargain-hunting in December. This month’s figures potentially paint a bleak picture for the first month of 2020 on the high street.
“We’ll only see the real impact of such extensive discounting when retailers publish their bottom-line performances. Discounting helps to shift volume and increase footfall but requires retailers to continue trading on thin margins and thin ice. There’s increasingly an expectation among consumers that there’s always a sale just around the corner.”
