Proactive Investors - UK retailers have experienced the longest slump in sales since the pandemic after consumers cut back on spending for a fifth consecutive month in February.
Total industry sales fell by 1.3% last month, compared to February 2023’s jump of 6.4%, retail data from accountancy firm BDO found.
High street sales experienced a 2% drop, counteracting a 2.9% surge in online business, with colder, more inclement and the school half term having reduced footfall throughout most of the month.
Fashion sales dropped for the 22nd week in just under half a year, falling by 4.8%, while homeware revenues dropped by 4.1%.
Lifestyle was the only category to see sales rise, lifting by 3.9%, with celebrations like Valentine’s Day helping both in-store and online revenues increase year-on-year.
“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,” said Sophie Michael, head of retail and wholesale at BDO.
Despite inflation having reduced significantly since the start of 2023, the BDO remains cautious that prices are still far above those from two years ago and is therefore still putting pressure on households.
News of the UK entering a recession is also expected to affect spending and supply chain issues hurting costs will put additional pressure on retailers as they head into Spring.
Michael said: “Retailers will increasingly be challenging themselves and asking whether certain stores are viable, or if the costs of running their existing physical footprint are simply too high.
“We should expect to see more consolidation of brands and acquisitions over the next six months as a result.”