U.K. Retailers Post Worst Sales Slump Since Financial Crisis
(Bloomberg) -- British retailers suffered their biggest sales decline since 2008 last month as two snowstorms dubbed the “beasts from the east” kept shoppers at home.
Comparable sales in midmarket stores dropped 10.1 percent in March, the second-worst month on record, business advisory firm BDO LLP said in its monthly report. Several days of subzero temperatures and extraordinary snowfall disrupted Britain’s road and rail networks.
“March was a brutal month for stores,” Sophie Michael, head of retail and wholesale at BDO, said in the report. “The weather was severe, and shoppers’ reaction showed how paper-thin consumer confidence is currently.”
The inclement weather has added to the misery for Britain’s retailers, who are already struggling with a surge in costs and weak consumer spending. Toys “R” Us U.K. and electronics retailer Maplin collapsed in February. That was followed by Conviviality Plc, which operates the Bargain Booze chain, this month. Sellers of everything from carpets to suits to kitchens have reported dismal business.
After the upheaval over the winter months, there are signs that the Brexit-induced squeeze on living standards is subsiding: U.K. wages are rising at the fastest pace since the end of 2016, and inflation is slowing. Next Plc Chief Executive Officer Simon Wolfson said he believes the worst is over after one of the most difficult periods of his 17-year tenure.
While retailers on Britain’s shopping streets bore the brunt of the impact from the snow, the beasts from the east also knocked 22 million pounds ($31 million) off grocery sales in March, according to researcher Kantar Worldpanel.
Other highlights from the BDO report:
- Sales of household goods fell 13.2%, fashion sales down 12.7%
- Online sales rose 11%, which was the worst monthly performance since December 2015
- Sales growth was flat in the week leading up to Easter Sunday, as widespread rainfall denied retailers some much-needed relief
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