According to key retail reports, December fashion spending showed a rise, albeit not as significant as initially expected. The monthly report from Barclaycard revealed that consumer spending on essential items experienced significant growth, with a notable increase of 13.7% over a two-year period. However, the growth in clothing spending was slower, and department stores fell behind supermarkets and discounters in terms of sales performance. Despite an overall growth of 12.2% in consumer card spending, the impact of the Omicron variant hindered some final Christmas preparations. Additionally, spending on non-essential items also experienced a slower growth rate of 11.5% compared to the impressive 18.3% increase seen in November. Barclaycard suggests that concerns over Omicron and consumers beginning their festive shopping earlier in November may be attributed to this slowdown.
Regarding clothing expenditure, December witnessed a smaller growth rate of 8.8% compared to the significant 13.4% increase in November. The cancellation of Christmas parties and social events contributed to the disappointment in the anticipated surge in partywear sales. Moreover, department stores faced a decline of 7.1% compared to 2019. Although spending on clothing increased, actual clothing transactions experienced a decrease of 1.7%, and department store transactions fell by 11.1%. However, categories such as pharmacy, health, and beauty demonstrated a spending rise of 12.3% and a transaction increase of 4.2%. Sports and outdoor retailers saw a remarkable spending increase of 22%, with transactions rising by 10%. Discount stores also performed well, with a significant 23.7% increase in spending and a 10.1% rise in transactions.
Another monthly retail report from the British Retail Consortium and KPMG also indicated growth, with total retail sales rising by 2.1% year-on-year and 4.6% in comparison to 2019. Although sales of clothing and jewelry were expected to flourish during December, the report observed a spike in sales of loungewear and a decline in formalwear. This change in consumer behavior can be attributed to work-from-home advice and the cancellation of Christmas events. Helen Dickinson, Chief Executive of the British Retail Consortium, emphasized the challenges that the retail industry will face in 2022. Rising inflation, increasing energy bills, and the impending national insurance hike in April were mentioned as significant concerns. Dickinson emphasized the need for agility and resilience to navigate these difficulties, alongside addressing labor shortages and the escalating costs of transport and logistics.
Useful links:
1. Barclaycard: UK Spending Trends for December 2021
2. British Retail Consortium: Retail Sales Growth in December
