It’s been a busy week for retail news, what with the resignation of M&S boss Marc Bolland, Next blaming its poor performance on the weather (again) and Sainsbury’s unexpected bid for Argos owner Home Retail Group. But it seems likely that there are plenty more revelations on the way as Britain’s shops count the cost of a difficult Christmas.
The worst Christmas since 2008, in fact, if you believe the latest research from BDO. Its monthly high street sales tracker recorded a 5.3% decline in like-for-like high street sales in December, the biggest drop in seven years.
Fashion retailers did the worst thanks to the aforementioned warm weather, with a 5.4% dip, while sales of ‘lifestyle’ goods were down 3.7%. Homewares did much better, up 16%, but that wasn’t enough to offset an overall decline.
Although things picked up a bit towards the end of the month, sales were still down 2.6% in the final week of December. The 5.3% dip doesn’t include revenue generated online, but total non-store sales were up by just 7.5% - the lowest figure BDO has on record.
‘Many retailers had held out for a last minute sales Christmas rush that never arrived,’ said Sophie Michael, BDO's head of retail and wholesale. ‘After Black Friday, many shoppers seem to have sat tight and waited for the sales to start on 25 December. Early indications are that activity in January strengthened, so retailers will be hoping they can claw back some ground in the traditional January sales period.’
These figures are all the more startling given that they don’t even take into account the performance of grocery retailers, which are expected to be among the biggest losers of this year’s festive season. We’ll be getting trading updates from Tesco and Morrisons next week and it doesn’t look like they’re going to be pretty.