Is the high street facing its toughest year yet?
- Retail sales have declined for five consecutive months.
- In-store sales dropped by 1.7% compared to last year.
- Lifestyle sales decreased by 0.3%, while fashion and homeware fell by 2.3% and 2.4% respectively.
- Online sales were the only category to see growth, with a 10.9% increase.
- Experts warn that deep discounting is impacting profit margins.
- The first half of the year has been the worst for retailers in over a decade.
Retail sales have experienced a significant downturn, marking the fifth consecutive month of decline as reported by BDO’s High Street Sales Tracker. In June, total in-store like-for-like sales fell by 1.7% compared to the same month last year, which had seen a modest increase of 1.3%. This trend is concerning, as it also marks the ninth month in a row where sales growth has not surpassed 1%. nnBreaking down the categories, lifestyle sales saw a slight decrease of 0.3%, while fashion and homeware faced more substantial declines of 2.3% and 2.4%, respectively. In contrast, the only bright spot was the internet and mail order sector, which reported a notable increase of 10.9%. nnSophie Michael, head of retail and wholesale at BDO, expressed her concerns about the current retail climate, stating that the challenging start to the year shows no signs of improvement. She highlighted that deep discounting is likely to further squeeze already tight profit margins, exacerbated by rising costs and the ongoing debate over unfair business rates affecting high street retailers. nnMichael emphasized that these figures confirm the fears of many in the retail sector, indicating that the first half of this year has been the worst in over a decade. She noted that consumer spending has significantly decreased, both online and in physical stores, with extreme weather conditions earlier in the year compounding the issue. Without a significant turnaround, 2018 is shaping up to be a disastrous year for the high street.
Factuality Level: 9
Factuality Justification: The article provides accurate and objective information about retail sales figures, citing data from a reliable source (BDO’s High Street Sales Tracker) and includes expert commentary on the situation in the retail industry. The only potential issue is the use of the term ‘annus horribilis,’ which is subjective and adds a slight personal perspective to the article.
Noise Level: 4
Noise Justification: The article provides relevant information about retail sales figures and expert commentary on the current state of the industry, but it could benefit from more in-depth analysis or discussion of potential solutions to address the issues mentioned.
Financial Relevance: Yes
Financial Markets Impacted: Retail industry
Financial Rating Justification: The article discusses a decline in retail sales, which can impact companies’ revenue and profitability, affecting their stock prices and overall market performance.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no mention of any extreme event in the last 48 hours.
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