Sophie Michael, Head of Retail at BDO, looks at a tough set of high street sales figures for April even when factoring in a dismal prior-year baseline
It’s been another tough month for the UK high street in April with the later Easter holiday failing to inspire UK consumers into a Spring shopping spree.
According to BDO’s High Street Sales Tracker (HSST), UK retailers saw April’s like-for-like trading grow just 1.9%.
But while April represented the first month of growth this year, it came off an extremely weak base. April 2016 recorded a year-on-year fall of -6.1%; the worst month’s performance since February 2009.
Despite the new season, April’s fashion sales managed growth of just 1.2%. Lifestyle retailers fared better, enticing overseas shoppers to take advantage of the weak pound and push like-for-like growth up 5.3% for the sector. Homewares sales dropped by -3.1% for April, but this was in the context of a strong comparative of 17.8% for home goods in April 2016.
While non-store sales grew by +15.1% in April, this was the lowest pace of monthly growth seen since September last year.
The Easter effect produced a small sales fillip – our figures show total growth for April would have been less at 0.16% with the week leading up to the Easter weekend excluded. Nevertheless, the failure to grow off such a low comparative base has alarmed retail analysts.
With Easter falling later, retailers would have been expecting a boost in sales in April, so these poor results will be clearly disappointing.
Retailers need to hold their nerve; focusing on product and range as well as innovative promotional activity to ignite spending – whilst preserving their profit margins.
With the warmer months in sight and a predicted flurry of overseas visitors to take advantage of the weaker pound, opportunities are out there for retailers with the right product and service offering.
Sophie Michael is Partner and Head of Retail and Wholesale at BDO.