April was tough for fashion says latest BDO retail sales report
It may have been the ongoing chilly weather, but consumers didn’t seem to be in the mood for updating their spring wardrobes last month.
The latest High Street Sales Tracker from BDO showed weak retail sales growth for fashion, as well as across the lifestyle and home sectors in April, with particularly poor online sales too.
Total retail like-for-like (LFL) sales grew by 2.2% compared to April 2022 with the fashion sector lagging this rate at only a 1.7% rise. It was the second consecutive month of poor results at a time when inflation is running in double digits.
And online sales were even worse with just a 0.6% uplift despite there having been a hike of 6.4% in the same month last year.
BDO also said that total physical store LFLs climbed by 4.4% in the month, from a strong base in April 2022, further underlining the strength of physical shopping compared to online.
Its Head of Retail and Wholesale, Sophie Michael, said the numbers “are yet more evidence of a reduction in discretionary spending as the competition for the consumer purse continues. Footfall data shows that consumers are getting out on the high street, and as prices rise, shoppers may be more inclined to shop in-store rather than paying extra for delivery and potential returns. However, overall sales volumes and transaction values remain low both in store and online.”
Looking at last month in more detail, BDO said that April started positively with a 4.96% increase in the first week year-on-year. The second and third weeks that included the Easter weekend and coincided with school holidays were also positive. They saw sales growth of 7.02% and 3.58%, respectively. But the performance “dipped significantly” in the final two weeks of the month, with sales growth falling to -2.99% in week four, and only being +0.18% in week five.
Michael added that the current period of high inflation and high interest rates “continues to be really challenging for retailers. Bookings for foreign holidays have now reached pre-pandemic levels, which could result in a number of consequences for the retail sector. Consumers spending on foreign travel means less discretionary spend for retailers and there is also a risk that with more people planning to travel overseas, the summer months may be even quieter than usual for UK retailers, particularly on the high street”.
That said, there are some plus sides to an increased amount of foreign travel. One is that consumers will be replenishing their holiday wardrobes and will possibly buy more beauty products. Another is that a similar fondness for travel may be happening abroad leading to more tourists arriving in Britain.
But this “is likely to disproportionately benefit tourist hot spots rather than the whole of the UK and some of the areas that may need it the most”.
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