Spending on high street ‘in two halves’

Retailers suffered a “month of two halves” in January as a strong start to the year petered out, leaving high street sales growth flat, a report published today has found.

Overall, like-for-like sales in January dipped 0.4 per cent year-on-year, according to BDO’s December High Street Sales Tracker. This was despite the first week of the year recording like-for-like growth of 14.3 per cent – the best weekly performance in three years.

The fashion sector finished 1.2 per cent down for the month, as shoppers engaged in tactical buying, taking advantage of planned discounting on key lines at the beginning of the month which saw it record 17.1 per cent growth in the first week. However, buyers eschewed less popular lines with heavier discounts at the end of the month as sale stock and choice ran low.

Homewares also had a poor month. Despite robust sales of smaller items like cutlery and crockery in the first two weeks, overall sales for the month were down 4 per cent as low consumer confidence put shoppers off big ticket items.

Retailers were also hit by the heavy snowfall in the third week of January, which put already cautious shoppers off.

Don Williams, national head of retail and wholesale at the accountancy firm, warned that the poor end to January did not bode well for February, a “notoriously difficult month” for retailers.

He said: “People spent their Christmas money and vouchers carefully at the beginning of the month and then, when faced with diminishing sale stock, terrible weather and bleak economic forecasts, battened down the hatches.”