Fashion sees hot sales in cold November, footfall dips, online contribution cools
UK retail’s best November in six years had chilly weather to thank as the struggling fashion sector enjoyed its first growth since January.
Research firm BDO said sales grew 1.7% year-on-year last month, the best overall monthly performance since September 2015. But the body also warned this could well be one of the last sprees before prices rise next year.
Clothing responded to the dip in temperatures last month with demand for winterwear reflected in a 1.5% on-year rise in sales. Sales of homewares also rose, with only the lifestyle sector falling.
However, as is usual with UK retail, the wider picture for November wasn’t crystal clear. How so?
Footfall across the UK also dropped in November, albeit by the slenderest -0.1% year-on-year margin, as all sectors showed declines, reported Springboard on Monday.
High streets were down 0.7%, retail parks dipped 0.1%, and shopping centres fell 2.3%.
Importantly however, high streets continue to bounce back and last month’s slight decline was way ahead of a year ago’s 3.4% dip.
Conversely, shopping centres continued their woeful run while retail parks reflected their slowdown in the growth of footfall to out of town destinations.
Springboard also highlighted the “ongoing significance” of Black Friday for the high street as well as online last month.
“November was the seventh month with an improvement in high street footfall, but Black Friday is the key trading feature of November; not only was it the busiest trading day of the month but footfall rose by 2% from Black Friday last year,” noted Springboard insights director Diane Wehrle.
Significantly, she added: “Online purchases rose by 6.7% versus a forecast increase of 25%, demonstrating that while consumers shopped and researched discounts online, they also visited bricks & mortar stores.
On the “concerning” ongoing trend in shopping centre footfall, she said: “Some of this reduction is inevitable, as malls are dominated by retailers that trade equally effectively online, leading to a shift away from the need for frequent functional trips to longer, leisure driven trips that are undertaken less often.”
She added: “The challenge for malls is future proofing their success by delivering an integrated retail experience that satisfies consumers’ appetites, suggesting that if investors don’t regain confidence to invest in upgrading their shopping centres, the decline could continue throughout 2017.”
Back with the BDO figures, Sophie Michael, head of retail and wholesale said shoppers were enjoying a final spree while the economy exceeds growth forecasts.
“Consumer spending may appear to be robust for now as many people are having a final shopping spree while the economy is exceeding growth expectations.
“[But] the challenges facing retailers continue to mount, which will inevitably impact on retailers’ costs and consumers’ disposable income and the question is ‘when’ not ‘if’ the spending squeeze will come.” -WGSN