Member Article

Summer dip on the high street

Shoppers stayed away from the high street in July, thanks to a mix of rainy weather and economic uncertainty.

According to BDO’s July High Street Sales Tracker shows like-for-like sales at mid-tier retailers were down 2.9% year-on-year; the sharpest fall in retail sales since October 2011.

Fashion stores saw sales drop 2.6% year-on-year due in part to retailers struggling to ensure seasonal lines are in synch with unpredictable weather, while non-fashion sales fell 1.5%.

Homewares saw the biggest decline, with a drop of 13% on the same period last year, as consumers were reluctant to make big ticket purchases.

Don Williams, National Head of Retail and Wholesale at BDO LLP said: “With consumers increasingly value-conscious it is still a challenging climate for retailers, and the rain in early July did not help.

“But it is dangerous to just blame the weather. There are retailers, particularly in the discounting space, who are bucking this trend through flexible and responsive supply chains. The quicker you can get your products to market, the louder you will hear tills ring. Many fashion stores were caught out when, after weeks of rain, Britain basked in temperatures of 30 degrees. Getting your supply chain right is the new retail battleground and those who achieve flexibility and agility will survive and prosper.

“Sales through non-store channels again brought some cheer to retailers, with an uplift of 24.9% year-on-year. Retailers are continuing to improve their online environment which is clearly reflected in the figures. This investment is critical if retailers are to keep up with the changing demands of consumers and offer them the products that they want in a way that is most convenient to them.”

Adam Stewart, Marketing Director at Rakuten’s Play.com: “The fact that online sales are up a staggering 25% compared to last July shows how retail is changing and how online should be playing an increasingly important role for retailers.

“It’s not surprising that high street sales have dipped this summer. With the wet weather and the expected congestion in London from the Olympics, consumers have understandably been avoiding the high street. At the moment it’s risky even to run from shop to shop without an umbrella and people want to steer clear of the anticipated congestion that the Olympics has brought to London’s busiest shopping streets.

“This huge increase in online spend over the last year is proof that more and more customers are not only searching the internet for great products and prices, but also making the final decision to buy online, and retailers needs to take note and devise a strategy which uses the strengths of both the online and offline channels.

“The high street and internet can be combined to strengthen a retailer’s offering, with many people using their mobiles on the go to find deals nearby and laptops at home to research prices before going out to buy on the high street.

“Campaigns that effectively link up online and offline offerings include issuing online vouchers to be redeemed in store and incentives on social media rewarding brand loyalty. The results of the BDO high street tracker show that it’s imperative to have an online offering but it’s even more important that online does not herald the death of the high street.”

Image by Alan Cleaver

This was posted in Bdaily's Members' News section by Tom Keighley .