UK's retail sector witnesses fifth month of negative sales in February

Total in-store and online sales fell 1.3 percent in February, marking the fifth consecutive month of negative sales results, according to new data from BDO’s High Street Sales Tracker.

BDO research found that the fashion and homewares sectors both performed very poorly, with like-for-like sales declining 4.8 percent and 4.1 percent respectively. In-store sales for the fashion sector were down 8.2 percent compared to the same month last year, while the lifestyle sector sales rose 3.9 percent.

Commenting on the data results, Sophie Michael, head of retail and wholesale at BDO, said: “This run of negative like-for-like sales covers both the build up to Christmas, which retailers would expect to be their busiest and most profitable period, and the stock clearance period in the new year sales.”

“Since we started tracking both online and in-store sales in 2017, the only time we’ve seen results this poor was during the 2020 Covid-19 lockdown period, when the majority of non-essential retailers were forced to remain closed,” Michael added.

BDO’s data, which looks at sales across discretionary spend categories, showed that despite online sales growing by 2.9 percent compared to last year, in-store sales fell 2 percent, bringing the overall performance of the retail sector down into negative territory.

Separate research from BDO’s bi-monthly survey of mid-market businesses found that more than two thirds (69 percent) of retail and wholesale businesses see high operating costs as well as the cost of borrowing, as one of their most significant challenges over the next six months. This is seen as more of a concern than supply chain issues or skills shortages.

Michael further said: “While the stiff competition for consumers’ discretionary spend remains and retailers experience continued pressure on their finances, those that fail to adapt and adjust their business models to their customers’ demands will be at risk. Measures from the Government should aim to drive growth as we’re at risk of seeing more businesses collapse in a sector that is integral to society and the economy.”