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LONDON (Alliance News) - Evidence of the challenges facing the UK high street retailer this year continued to accumulate in the first two weeks of October, with new figures showing in-store sales declined for the eighth month in a row.
However not every retailer is feeling the chill.
Figures from advisory firm BDO's High Street Sales Tracker, showed that September sales dropped 2.7% on the prior year, marking the eighth consecutive negative month for in-store buying and the 12th month since growth exceeded 1% for retailers.
The data was slightly improved by non-store sales growth of 12% on the prior year, which was the third-lowest monthly increase this year and the worst non-store September performance for at least eight years, since record began in 2010.
Dismal footfall, Brexit uncertainty and sluggish wage growth were cited by analysts at Deloitte as the causes behind a tough year for the UK retail sector.
"Consumer confidence has risen but growth in spending has slowed. Inflation has fallen as predicted, but so has wage growth, meaning that there has been no easing of pressure on consumers," Deloitte's Lead Partner Ian Geddes and Head of Consumer Business Research Ben Perkins said.
Furthermore, a shift to online shopping, increased rents and business taxes have added to the pressure on high street businesses, prompting many retailers to issue warnings, close shops and, in some cases, file for protection from creditors.
The first half of 2018, saw 4,400 net store closures across the UK high street, up from 103 in 2017, Deloitte said.
The latest retailer to suffer from these trends was WH Smith, which on Thursday reported pretax profit from its High Street business slipped to GBP60 million from GBP62 million.
The books, newspaper and stationery retailer announced an overhaul of its High Street division with six stores closures planned. WH Smith said it will take a "forensic" approach to its cost base to ensure the business remains "fit for purpose".
Also on Thursday, clothing retailer Coast collapsed into administration, with all its 24 standalone stores due to close, putting 300 jobs at risk.
Earlier in the year, retailers such as Mothercare PLC, Carpetright PLC, New Look, Poundworld, Homebase, House of Fraser have either sought help to stay afloat, or have been forced into administration, all citing th shift to online shopping, increased rents and business taxes.
Senior Market Analyst at City Index Fiona Cincotta said: "Clothes retailer Coast is the latest high street chain to fall foul of increased consumer caution and reduced retail spending ahead of Brexit.
"This 'batten down the hatches' mentality has been bad news for many retailers that depend on high footfall from UK shoppers."
And it's not just retailers. Sharing the same high street, cafe chain Patisserie Holdings this week dramatically announced it had discovered "significant and potentially fraudulent" accounting irregularities. The Patisserie Valerie owner, with over 200 stores across the UK, warned it would be unable to trade without "immediate" funding. It suspended its finance director, who was later arrested then released on bail.
However, the latest trends among the food retailers and supermarkets seem to be going against the current, with the latest figures from Greggs PLC and Tesco PLC showing good growth.
This week, bakery and food-on-the-go retailer Greggs reported growth in like-for-like sales for its third quarter of 3.2% with total sales up 7.3%.
At the beginning of October, Tesco, the UK's biggest supermarket, reported a rise in pretax profit of 2% year-on-year to GBP564 million from GBP553 million for the first half of the year. Revenue, including VAT and fuel, came in 12% higher than the prior year at GBP31.73 billion versus GBP28.33 billion.
Following on this trend, Kantar Worldpanel figures, for the 12 weeks to September 9, showed an increase in supermarket sales across the board with German discounters Aldi and its rival Lidl "outpacing the market".
Geddes and Parker added: "The weather improved in the second quarter, which combined with a World Cup and a Royal Wedding brought a much needed boost to UK retail.
"Supermarkets benefited from increased sales of food and drink as consumers fired up their BBQs and celebrated the arrival of summer."
Meanwhile, some non-food retailers are weathering the storm better than others.
This week, N Brown Group PLC narrowed its interim loss slightly, while revenue increased 1% helped by a good performance in its online business. The company is now looking to shift to a "fully online" retailer.
Also reporting good results, at the start of October, Ted Baker PLC said revenue rose 3.6% during the first half of the year. The upmarket fashion retailer's profit however was hurt by the failure of House of Fraser, with which it operated concessions. Earlier luxury handbag maker Mulberry PLC had warned of the same knock-on effect.
Commenting of the BDO latest figures, Sophie Michael, head of retail and wholesale at BDO, said: "2018 has been an incredibly challenging year for retailers and there are no signs of this abating.
"Footfall on the high street has been dropping at an increasing pace, which will be of serious concern as retailers enter the crucial Christmas season. Somehow that decline in footfall needs to be reversed."
Despite the gloomy outlook for many retailers, Deloitte analysts agree that not all is lost.
Geddes and Parker concluded stating: "Retail will survive and it will be a stronger sector as a result of this evolution. There will be fewer shops in the future but this does not mean the store is dead, it just means that the role of the store is changing."
Still showing confidence is entrepreneur Mike Ashley. His Sports Direct International PLC on Friday bought department store property Frasers in Glasgow, Scotland, from the City Council for GBP95 million, with plans to invest to "further elevate and enhance this iconic department store".
At the beginning of August, Sports Direct rescued House of Fraser out of administration for GBP90 million.
