British high streets hit a new low last month.
U.K. sales in September fell 1.3 percent from year-ago figures, representing the worst sales growth for the month since 1995, according to the British Retail Consortium (BRC).
The year to date has tallied four months of negative sales growth since March, which also occurred amidst a high rate of store closures along U.K. high streets that prompted Usdaw, a shopworkers union, to launch a Save our Shops petition urging the British government to take action to protect retail jobs and struggling stores.
“Over 74,000 retail workers lost their during 2018 and so far this year, the rate of store closures and job losses has increased dramatically,” said the petition, which as of Monday listed 5,801 signatures.
BRC CEO Helen Dickinson said, “With the spectre of a no-deal weighing increasingly on consumer purchasing decisions, it is no surprise that sales growth has once again fallen into the red. Many consumers held off from non-essential purchases, or shopped around for the bigger discounts…..” Dickinson said the longer-term prospect continues to be bleak, with the “12-month average once again plumbing new depths at a mere 0.2 percent.”
It wasn’t much better at online non-food retailers, where sales growth was the lowest on record.
Dickinson pointed the finger at the ongoing political gridlock surrounding Brexit as harmful to both consumers and retailers. “Clarity is needed over our future trading relationship with our closest neighbors, and it is vitally important that Britain does not leave the EU without a deal,” she concluded.
Paul Martin, U.K. retail partner at KPMG, said, “Ongoing Brexit uncertainty is clearly having a material impact on the consumer psyche, with all but one non-food category being in decline in September. Consumers are choosing to focus on the essentials, with food one of the few categories delivering growth.”
Martin expects to see increased promotional activity to clear surplus stock, which he said “doesn’t bear well for retailers desperately trying to make up for lost ground after several difficult months.”
The U.K. is slated to leave the European Union on Oct. 31, deal or no deal, if prime minister Boris Johnson has his way. But Members of Parliament last month passed the Benn Act to avoid a no-deal Brexit, and the legislation now requires Johnson to request by Oct. 19 from the E.U. president a 30-day extension of the exit deadline through Jan. 31, 2020, provided that Parliament has approved neither a withdrawal agreement nor a no-deal Brexit.