The fashion industry in the UK encountered difficulties in April as consumers struggled with the increase in household expenses, according to a report by Barclays and the British Retail Consortium (BRC). Despite a modest rise of 4.3% in consumer spending on payment cards, the figure was disappointing considering the soaring inflation rate, which made it hard for consumers to allocate funds towards discretionary purchases like clothing.
Even with the arrival of spring and the Easter Bank Holiday weekend, which typically boosts consumer interest in buying new clothes for socializing and outdoor activities, clothing sales saw a significant decline for the third consecutive month, dropping by 2.3%. A survey conducted by Barclays revealed that new clothes and accessories were among the main areas where Britons cut back to save money. Approximately 60% of respondents claimed they reduced their fashion expenditure, prioritizing spending on essentials like groceries instead. Grocery spending increased by 5.5% in April, with consumers actively seeking discounted food and utilizing money-saving vouchers. As a result, consumers opted to make do with the items already in their wardrobes rather than investing in new clothing.
On the other hand, the BRC-KPMG monthly retail sales monitor reported a 5.1% rise in retail sales in April, compared to a 0.3% decline in the same period last year. However, the report highlighted that consumers were purchasing fewer goods due to the higher inflation rate. The fashion industry faced particular challenges during this period, with sales of clothing underperforming due to poor weather conditions, which made consumers think twice before updating their summer wardrobe. However, there was an increase in sales of jewelry, watches, and cosmetics due to a rise in overseas tourism over the Easter period.
The Barclays report did offer some hope to the fashion sector, as spending on non-essential items experienced higher year-on-year growth in April at 4.6% compared to 3.5% in March. This growth was reflected in sport and outdoor retailers, which saw a slight increase of 0.6% in April after experiencing a decline of 4.5% in March.
Furthermore, there may be a glimmer of hope for the fashion industry as Britons are still eager to book holidays for later in the year. Spending on airlines saw a significant 32.1% year-on-year increase, surpassing the March figure of 28.5%. Despite their efforts to economize overall, consumers are also increasingly confident in their household finances and ability to spend on non-essential items, with confidence levels at 67% and 56%, respectively, compared to 59% and 48% the previous month.
Overall, the fashion industry faced challenges in April as consumers dealt with rising household expenses. While clothing sales declined, other retail sectors experienced modest growth. However, the industry can find some solace in consumers’ optimism about future spending and their willingness to invest in travel, indicating potential opportunities for recovery in the coming months.
Useful Links:
– Barclays Business Confidence Article
– British Retail Consortium (BRC) Newsroom
