Jul 3, 2020
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Fashion sales dropped 20%+ last month, despite online surge - BDO

Jul 3, 2020

More figures are emerging to show that UK retail sales have started to recover but remain well down on where they should be at this time. And fashion is still under heavy pressure.

Many shops reopened last month but they were far from busy - Photo: Sandra Halliday

On Friday, the BDO High Street Sales Tracker for June showed non-food physical retail suffered a 14.4% decrease in sales last month, although this was the best result since before the lockdown.

It means physical retail has seen five straight months of negative like-for-like sales in 2020, but June sales were nonetheless the best since February.

Sophie Michael, Head of UK Retail at the accountancy and advisory firm, cautioned that low consumer confidence “means the road to recovery remains uncertain”.

The company said June 2020’s 14.4% decline (covering both in-store and online) came against a 3.5% uplift this time last year. And it was clear that an ongoing surge in online sales wasn't enough to make up for the closure of physical shops.

Total non-store like-for-like sales rocketed by 102.6% this month from a base of +16.5% in June 2019, marking the third consecutive month where total non-store like-for-like sales recorded an increase above 100%.

Like-for-like sales across all channels were down 23.9% after rising 0.6% a year ago and were negative for two out of three sectors (fashion and lifestyle) in June, with homewares the only sector to show sustained positive performance. 

Fashion like-for-like sales fell by 20.9% in the month, but from a good base of +4.8% for June last year. The category has now recorded four straight months of negative LFL sales with each month at least partially hurt by the lockdown of non-essential retail shops.

Sophie Michael said: “Despite the opening of non-essential retail and a strong performance of non-store sales in June, retailers have a long way to go to claw their way back following three months of closure.

“It will take time for both retailers to resume operations and for consumers to regain the confidence to head back to bricks-and-mortar establishments. The strength of non-store sales throughout the lockdown shows that spending has not entirely dried up, and while the re-opening of shops will be a welcome sign, for many it may not bring immediate results. Retailers should remain cautious and continue to invest in the ever-more-critical non-store channel, given the acceleration of the continuing shift to online.

“The reality is that consumer confidence remains historically low, well below pre-crisis levels. Despite the Government’s ambitious plans, the road to recovery will be challenging and fraught with uncertainty until the real impact of the pandemic is understood, and therefore any early signs of a high street recovery may prove to be a false dawn.”

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