Shoppers have become increasingly jaded by high street discounting, with retailers witnessing the worst November in three years despite Black Friday efforts, figures released by accountancy and business advisory firm BDO LLP reveal.
According to BDO’s High Street Sales Tracker (HSST), in-store sales declined by -2.6% year-on-year in November. The slump follows a poor October (down -2% year-on-year) and marks the tenth consecutive month of negative in-store growth.
Despite retailers trying to ring in sales with extended and targeted discounting, Black Friday week provided little respite with in-store sales remaining flat at +0.4%.
Meanwhile, online retail had a bumper month. Non-store sales increased +18.2% in November from a solid base of +17.5% in the equivalent month last year. The leap marks the best monthly like-for-like result for non-store sales this year.
In addition, Black Friday brought about the best weekly non-store performance in 2018 to date. It also marked the strongest result for a Black Friday week since 2014 (up +30.8% compared to last year).
Like-for-like in-store sales of lifestyle goods were down in each week to record a year-on-year drop in November of -4.8% – the worst November for in-store lifestyle sales for a decade. In-store lifestyle sales dropped as far as -9.1% in the second week of November.
Homewares sales did get a bump during Black Friday week (growth of +4.3% in the fourth week of November from a strong base of +6.6% in the same week last year) but in-store like-for-like growth for the month overall was marginally down by -0.4%.
Fashion sales also dropped in-store by -1.7% year-on-year in November, marking four consecutive months of decline and eight out of eleven months this year with no growth.
Sophie Michael, Head of Retail and Wholesale at BDO, said changing consumer shopping habits and the contrast between bricks and mortar and online sales will define this festive season for retailers.
“Retailers will be very disappointed with the flat in-store sales in November. They will be deeply concerned to enter the crucial Christmas trading period off the back of another poor month.
“Looking at Black Friday 2018, we can see two prominent trends; firstly that consumers are holding off spending until the discounting starts and secondly, when they do purchase, it’s through online channels and not on the high street”, she added
Writing in BDO’s annual Retail Forecast Report for 2019, she said: “For retailers to stay relevant, they have to develop a seamless omnichannel approach to their marketing and communication to shoppers, utilising the number of touchpoints during the purchasing process to engage with consumers and create loyalty.”
She adds: “Last year, high street retailers suffered their fifth successive December of negative growth. Given the poor performance of UK retail for the year, they will be desperately hoping that this December won’t mark yet again another poor month of Christmas trading.”