Nov 10, 2017 - Total like-for-like sales crashed to -5.2% in October from a base of +0.7% for the same month last year.
BDO HIGH STREET SALES TRACKER
nt
OCTOBER MONTHLY REVIEW - the five weeks to 29 October 2017
TOTAL (excl non-store) -5.2% October 2016: +0.7%
10 November 2017
Sales spooked in most horrific October on record Total like-for-like sales crashed to -5.2% in October from a base of +0.7% for the same month last year. The result was the worst month seen since April 2016 (-6.1%) and the worst October on record for the High Street Sales Tracker. A fall in spending, a drop in consumer confidence and unseasonably warm weather combined to hit sales hard this month.
Total LFLs were down in each week of October, with the month low of -6.55% coming in week four. October began down by -5.20%, which at the time was the lowest result seen since mid-February. In week two, despite a significant annual increase in the number of Chinese tourists coming to London for "Golden Week", sales stubbornly remained in negative territory (-3.43%). In week three sales fell by -5.89% as warm weather continued to hurt sales of seasonal fashion lines. In week four, sales were down by -6.55%, the worst weekly result of the year-to-date. This may have partly been caused by heavier discounting reported in the equivalent week last year. As October ended, the last full week prior to Halloween provided little cheer, as LFL sales fell by -5.05% from an already negative base of 2.70% for the equivalent week the year before.
While lifestyle and homeware fell marginally, fashion LFLs hit the deck in October as the general spending slowdown and warm weather hurt sales.
Overall footfall was down in each week of October, with the month low of -2.9% coming in week four, as compared to the same week the year before. Footfall on the high street also saw no growth in every week of the month, the low of -3.5% also coming in week four. Footfall at retail parks ended the month with an increase of +0.4%, as compared to the same week last year. However each preceding week in the month saw a decline in footfall, with a low of -2.2% in week three. Shopping centres also experienced a decline in footfall in every week of October, down by as much as -3.3% in week four.
Consumers resisted spending in October following the rise of the Consumer Price Index (CPI) to 3% in September. Recent confidence barometers have also suggested a creeping decline in economic and spending confidence amongst consumers. As wage increases continue to be outstripped by higher inflation, and with the (now real) anticipation of higher mortgage payments, then it comes as little surprise that people are tightening their belts prior to the anticipated Christmas expenditure.
Yet retailers are not alone. Leisure spending in general is under significant strain, with restaurant, pub and bar groups also feeling the pinch in recent weeks. With such a poor start to the fourth quarter in October, retailers will be looking to ensure that as much ground as possible is made up in the next two critical months, which of course incorporate Black Friday and Christmas trading. Early surveys suggest that consumers will be prepared to spend when the time comes, but October has borne the brunt of the current consumer resistance to significant expenditure at this juncture.
LIFESTYLE -0.1% October 2016: +2.3%
FASHION -7.9% October 2016: -0.9%
HOMEWARES -0.5% October 2016: +11.6%
NON-STORE +22.0% October 2016: +19.5%
Lifestyle LFLs were down by only -0.1% in October, a flat result from a positive base of +2.3% for the same month last year. However, this was the first negative month for lifestyle since November 2016. Despite posting negative LFLs in three weeks of the month, lifestyle appeared to be the only sector to really benefit from “Golden Week”, achieving a month high of +3.09% in week two.
Fashion LFLs were down by a significant -7.9% in October, from a base of -0.9% for the same month last year. This was the worst monthly result for fashion since April 2016 (-9.2%), and its worst October on record for the High Street Sales Tracker. In a month where many retailers extended their mid-season and other discounting initiatives, sales were down in every week of October. LFL sales hit a month low of -9.39% in week four, which was the worst weekly result for fashion since August 2016.
Homeware LFLs were down by -0.5% this month, but from a strong base of +11.6% for October last year. The result marked the first negative month for homeware since April, and only its third negative month in the year-to-date. Homeware recorded LFL growth in week’s one and four, but was down in every other week of the month.
Non-store LFLs were the only partial success story in October, up by +22.0% from a base of +19.5% in October last year and reflecting the increasing trend towards online spending. However, even then it is only the sixth highest monthly result for non-store so far this year. Sporadic spending saw a month high of +33.86% in week three, and a month low of just +8.19% in week four.
The High Street Sales Tracker outlines weekly like-for-like sales changes of c85 mid-tier retailers with c10,000 individual stores across Fashion: accessories, clothing, footwear. Lifestyle: general household goods, gifts, health and beauty, leisure goods. Homewares: cookware, furniture and floorcoverings, lighting, linen and textiles. Non-store: mail order, online and other non-store channels.
MONTHLY LIKE-FOR-LIKE RESULTS 2017
Week 1 Week 2 Week 3 Week 4 Week 5 (we 01/10) (we 08/10) (we 15/10) (we 22/10) (we 29/10)
LFL Growth %
Total October
Lifestyle
-1.77
3.09
0.70
-1.68
-0.84
-0.1
Fashion
-7.88
-6.05
-8.78
-9.39
-7.11
-7.9
Homewares
5.43
-4.45
-5.03
3.93
-2.78
-0.5
Non-store
15.50
19.84
33.86
8.19
26.21
22.0
Total (excl non-store)
-5.20
-3.43
-5.89
-6.55
-5.05
-5.2
MONTHLY LIKE-FOR-LIKE RESULTS 2007-2017 Overall
10
4 per. Mov. Avg. (Overall)
8 6 4 Growth %
2 0 -2 -4 -6 -8 -10
J M M J S N J M M J S N J M M J S N J M M J S N J M M J S N J M M J S N J M M J S N J M M J S N J M M J S N J M M J S N J M M J S
2007
2008
2009
2010
2011
2012
2013
2015
2014
2017
2016
MONTHLY LIKE-FOR-LIKE RESULTS BY SECTOR 2011-2017 Lifestyle
Fashion
Homewares
Non Store
60
25 20
50
Growth %
15
40
10
30
5 0
20
-5
10
-10
0
-15 J FMAMJ J A SOND J FMAMJ J A SOND J FMAMJ J A SOND J FMAMJ J A SOND J FMAMJ J A SOND J FMAMJ J A SOND J FMAMJ J A SO
2011
2012
2013
2014
2015
2016
2017
Further Information:
[email protected] This publication has been carefully prepared, but should be seen as general guidance only. You should not act upon the information contained in this publication without obtaining specific professional advice. Please contact BDO LLP to discuss these matters in the context of your particular circumstances. BDO accepts no responsibility for any loss incurred as a result of acting on information in this publication. BDO LLP operates across the UK with some 3,000 partners and staff. BDO LLP is a UK limited liability partnership and a UK Member Firm of BDO International. BDO - Belfast, a separate partnership, operates under a licence agreement. BDO International is a world-wide network of public accounting firms, called BDO Member Firms. Each BDO Member Firm is an independent legal entity world-wide and no BDO Member Firm is responsible for the acts and omissions of another member. The network is coordinated by BDO Global Coordination B.V., incorporated in the Netherlands with its statutory seat in Eindhoven (trade register registration number 33205251) and with an office at Boulevard de la Woluwe 60, 1200 Brussels, Belgium, where the International Executive Office is located. BDO LLP and BDO - Belfast are both separately authorised and regulated by the Financial Conduct Authority to conduct investment business. BDO is the brand name for the BDO International network and for each of the BDO Member Firms. BDO LLP and BDO - Belfast are the Data Controllers for any personal data that they hold about you. We may disclose your information, under a confidentiality agreement, to a Data Processor (Shamrock Marketing Ltd). To correct your personal details or if you do not wish us to provide you with information that we believe may be of interest to you, please telephone (Great Britain - 0870 567 5678 or Belfast - 028 9043 9009). Copyright © November 17 BDO LLP. All rights reserved. Website: www.bdo.co.uk
