UK retailers launched a barrage of discounts to try to clear stocks after a month of slumping sales as soaring inflation and bills hit household budgets and a warm autumn dampened demand for coats and boots.
On Monday, New style offered 50% off all products, Asos up to 80% off almost all lines and Boohoo 30% off everything, and many other fashion retailers including Marks & Spencer, River Island and Matalan, They were offering 20-30% off. .
The discounts came as industry insiders warned that several online fashion sellers had seen sales declines in November of more than 10% year-on-year.
Online retailers have been hit particularly hard by a combination of unusually mild weather affecting sales of more expensive coats, sturdy footwear and knitwear, the cost of living reducing shoppers’ purchasing power and more competition from a high street. principal that recovers. from the 2021 Covid lockdowns and Omicron fears.
Despite that recovery, physical stores continue to suffer. UK shopping destinations posted a 4.2% year-on-year increase in visitor numbers in the week to Saturday 26 November, which included the Black Friday discount day. However, visitor numbers remained 14% below pre-pandemic levels, with coastal and market towns and regional cities particularly struggling to recover.
The Confederation of British Industry (CBI) said retailers were “feeling the cold” with sales receding this month and a similar level of decline was expected in December after rising in October.
Its retail sales balance sheet, which marks the difference between the percentage of retailers reporting an increase in sales versus those reporting a decrease, fell to -19% in November from +18% last month, and is forecast to fall. to -21% in November. December.
Martin Sartorius, chief economist at the CBI, said the survey results “underline how difficult the moment is for the sector”.
He said: “It is not surprising that retailers are feeling the cold as the UK continues to be buffeted by economic headwinds. Sales volumes fell steadily in the year to November, and retailers remain remarkably pessimistic about their future business prospects. This pessimism is reflected in investment intentions worsening by the most since May 2020.”
Kien Tan, a retail expert at advisory firm PricewaterhouseCoopers, said online retailers seemed to be discounting more as life got harder for them. “The overall pie has narrowed for online retailers,” Tan said, suggesting discounts are likely to get more intense closer to Christmas as retailers try to clear out stocks sooner. the economic crisis expected for next year.
However, he said the general discount level appeared to be similar to last year, with fewer retailers offering general discounts and most focused on trying to change cold-weather clothing.
Those with warehouses full of piles of unsold fashions hoarded for winter are eager to liquidate unwanted stock, as the cost of storage has nearly doubled since the pandemic began.
Shipping firm Maersk said low demand and full warehouses meant its customers were reluctant to pick up their imports at ports and offered to slow cargo ships to ease pressure on Britain.