Bleak January posts retail sales drop after “lacklustre Christmas”

BDO covid-19 pandemic lockdown
The retail sector recorded its 11th consecutive month of negative total like-for-like sales in January
// Store sales dropped last month, making it the worst January on record
// Combined in-store and online like-for-like sales last month fell 10%

Retail sales in January have dropped, marking the worst January on record after a “disappointing” December period.

New research found that the retail sector recorded its 11th consecutive month of negative total like-for-like sales in January.

Combined in-store and online like-for-like sales last month fell 10 per cent, compared to a seven per cent rise during the same month last year, according to BDO’s High Street Sales Tracker.


READ MORE: Footfall goes from “bad to worse” in January


Meanwhile, online sales soared last month to their biggest on record with a 132.8 per cent increase year-on-year, as lockdown restrictions led to the closure of physical stores.

“This boost in online activity prevented sales from falling to the depths of the first national lockdown, though January’s result still marked the worst monthly total like-for-like result since June,” BDO said.

Fashion like-for-like sales in January fell 12.1 per cent, compared to a 7.7 per cent rise 12 months ago.

Nevertheless, homewares saw total like-for-like sales rise 6.7 per cent last month, from a 5.4 per cent rise for the equivalent month last year.

“You would normally see positive growth at the start of the year thanks to the post-Christmas sales, but this year retailers experienced a bleak January after a very lacklustre Christmas,” BDO head of Retail and Wholesale, Sophie Michael said.

“Recent retailer administrations point to a squeeze on the middle market. With unemployment set to rise further, the hit to discretionary spend will likely push shoppers towards value retailers and ever-growing online retail platforms, putting further pressure on the mid-market.

“The future for retailers is currently clouded by uncertainty with significant challenges ahead. Retailers have the additional problem of predicting how and when consumers will return, and at what level of spending.

“Added to this, consumers are already displaying potentially lasting new shopping habits and varying product preferences, across all age groups. These challenges together with the need to provide a Covid secure environment are no small feat given the mounting pressures they face.

“Providing a road map out of lockdown is a tall order, but one that retailers desperately need so they can begin to plan for a sustainable future.”

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