JANUARY BLUES: Heavy discounting in the run-up to Christmas — and low consumer confidence — took a hefty bite out of January retail revenue growth along the British high street, according to BDO’s monthly high street sales tracker.
In January, high street sales grew 2 percent year-on-year, boosted by post-Christmas discounting. The first week of 2015 produced the strongest weekly like-for-like figures for nine months — 10.3 percent — although the following four weeks in January failed to achieve even 1 percent year-on-year growth.
Last year, like-for-like growth was more than 17 percent in the third week of January.
Last month, the fashion sector grew by 0.7 percent, as widespread discounting hit core product lines and undermined efforts to release new lines early, BDO said Monday.
“The widespread discounting strategy that many retailers have adopted towards the latter part of 2014 has had a knock-on effect on the traditional January sales,” said Sophie Bevan, head of retail and wholesale at BDO LLP. “Following tradition, shoppers flocked to the stores in that first week after Christmas, but after that they lost interest pretty quickly.
“Despite the falling prices in oil and weekly food costs, the uncertainty surrounding (Britain’s upcoming) general election and negative news by the big supermarkets leaves consumers less inclined to spend. Consumers need a prolonged period of increases in their discretionary incomes to instill the confidence to motivate them to spend.”