Supply chain is the new retail battleground

Flexibility is the key to survival and prosperity says BDO

 

Shoppers stayed away from the high street in their droves in July thanks to the impact of rainy weather combined with economic worries, according to the latest sales figures from BDO.

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.

Although good weather at the end of the month brought some cheer to high street stores, concerns over the rising cost of living combined with low wage inflation weighed hard on consumers’ pockets.

Caution among shoppers could be felt across the high street.  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%.

Meanwhile homewares saw the biggest decline, with a drop of 13% on the same period last year. A combination of slow garden furniture sales due to poor weather and reluctance among consumers to splash out on big ticket items hit the sector hard.

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.”

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The BDO High Street Sales Tracker analyses like-for-like spending at non-grocery retailers with annual sales of between £5m and £500m

 

Notes to editors

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