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Suffolk and UK retailers face tough time as year-on-year sales plummet

PUBLISHED: 00:01 04 June 2019

The Trespass store in Ipswich town centre. New figures show the high street took a pummelling in May  Picture: ARCHANT

The Trespass store in Ipswich town centre. New figures show the high street took a pummelling in May Picture: ARCHANT

Archant

The UK's high street woes continued last month, as one measure showed the biggest retail sales decline since records began in 1995.

Ipswich's high street  Picture; ARCHANTIpswich's high street Picture; ARCHANT

Despite reports of pockets of better performances in Suffolk, the national picture is looking gloomy, with sales plummeting by 2.7% last month, compared to May 2018 - the worst decline since the BRC-KPMG retail sales monitor began in January 1995.

At the same time, separate Springboard footfall figures for the East of England showed a 3.4% fall, slightly above the general UK decline of 3.5%.

Ipswich has seen a string of retailers revealing they would be closing down, including most recently stationery store Ohh Deer in The Thoroughfare, Riley & Riley Jewellers in the Buttermarket, Trespass in Westgate Street and Cotswold Outdoors in Tavern Street.

MORE - 'Retail is tough at the moment' - Ipswich store's farewell message to town after closure

But Allan Hassell, centre manager at the town's Buttermarket, said footfall for the centre was up 3.4% for the same period, and while the going generally was tough, the town was doing what it could to encourage shoppers.

Shoppers in Bury St Edmunds town centre  Picture: MICHAEL STEWARDShoppers in Bury St Edmunds town centre Picture: MICHAEL STEWARD

"From our point of view, things haven't dramatically changed. It's a hard market as it always has been - the internet is never going away - it's part of the fabric of life," he said. "Certainly the East of England hasn't had the best of times."

But Ipswich was "quietly getting on with it", he said. "The key thing everyone has to look at is context."

Mark Cordell, boss at Our Bury St Edmunds, the town's Business Improvement District (BID), said May saw a 0.7% year-on-year decline in footfall, but this compared to an eastern region fall of 2.3%, and 2.1% nationally across market towns. "It's disappointing, but it's not overly concerning," he said. The town had managed so far to hang on to national chains which were cutting back on branches due to cost pressures, but the general situation was "challenging", he admitted. "Undoubtedly the retail situation across the country is not as good as it was two or three years ago, and Bury I am sure is not different, but we are still doing OK."

The British Retail Consortium pointed out that the 2.7% sales decline was against a backdrop of a particularly good performance in the high street last May, when there was a 4.1% year-on-year uplift. The May decline dragged three-month and 12-month average sales increases down to 0.2% and 0.9% respectively.

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UK retail sales fell by 3% on a like-for-like basis from May 2018, the steepest like-for-like decline since December 2008, excluding Easter distortions.

Over the three months to May, in-store sales of non-food items declined 2.7% on a total and like-for-like basis, while food sales rose 0.8% on a like-for-like basis and 1.9% on a total basis.

Meanwhile, online sales of non-food products grew 1.5% in May, an all-time low, against a growth of 11.5% in May 2018. The three-month and 12-month average growth figures were 2.9% and 5.4% respectively.

BRC chief executive Helen Dickinson said: "With the biggest decline in retail sales on record, the risk of further job losses and store closures will only increase. While May 2018 offered almost unbroken sunshine, topped off by the run up to the World Cup and the marriage of Meghan and Harry, May 2019 delivered political and economic uncertainty. Food sales dropped for the first time since June 2016, with further declines in clothing, footwear and outdoor goods.

"With retail conditions the toughest they have been for a decade, politicians must act to support the successful reinvention of our high streets and local communities. Business rates remain a barrier, preventing many retailers from investing in their physical space. We have a broken tax system, which sees retailers paying vast sums of money regardless of whether they make a penny at the till, and yet the government is failing to act. The legislation is falling behind the technological revolution."

Paul Martin, UK head of retail at KPMG, said April may have provided retailers with some light reprieve thanks to Easter, but May's "staggering" fall of 3% like-for-like was a "stark reminder" of the industry's ongoing issues, which for many require urgent attention.

"We are of course comparing this month's growth against a stellar May in 2018, but even the three-month average - which softens the monthly volatility - demonstrates that achieving growth in retail remains a real struggle," he said.

"The bank holiday weekends have given rise to the added interest in furniture and homewares, as shoppers set about making home improvements. However, the weather did little to convince fashion-minded shoppers to refresh their seasonal wardrobes.

"The extremely low growth online is real cause for concern, especially with almost a third of all non-food sales today being made online. This trend has continued to manifest itself over the last year and requires real focus from the retail community."

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