Fashion and department stores in the UK have seen a significant boost in sales in August, indicating a strong recovery from the impact of the pandemic. According to new figures from Barclaycard, fashion sales reached their highest levels since before the pandemic, while department store spending also experienced a notable increase. Additionally, the BRC/KPMG retail report revealed a return of shoppers to physical stores, with a decline in non-food online sales and a preference for in-store shopping.
The BRC/KPMG report highlighted a 4.6% decline in non-food online sales in August, accounting for less than 39% of total sales compared to 42% in the same period last year. This shift suggests that consumers are regaining confidence in physical retail spaces and are now more inclined to shop in-person. The report also noted a 3% increase in total sales, largely driven by a surge in formalwear fashion sales due to weddings and the reopening of offices.
Barclaycard’s findings further support this positive trend, showing that consumer spending across various sectors in August exceeded 2019 levels. The report indicated a 15.4% year-on-year growth in spending, driven by factors such as summer holidays and the gradual return of workers to offices. The return of employees to work and parents preparing for the new school year provided a welcome boost to retailers.
Clothing sales have consistently grown for the fourth consecutive month, with online sales experiencing a remarkable 33.5% increase and an overall rise of 12.8%. Shoppers took advantage of end-of-season sales to purchase workwear and school uniforms, reflecting a change in consumer behavior as office workers adapt to new work and lifestyle patterns. In fact, 27% of workers expressed their intention to allocate a larger budget for new clothes, shoes, and accessories to update their work wardrobe.
Department stores have also benefitted from the revival in consumer spending, recording a 4.4% increase in sales in August. This marked the second month of growth for department stores since the start of the pandemic, with the first growth recorded in May when non-essential shops had just reopened. The sales of non-essential items as a whole saw a significant rise of 15.9%, the largest increase since before the first national lockdown. This upward trend was supported by spending on socializing, purchases for UK holidays, and back-to-school/back-to-office supplies.
However, despite the optimism surrounding the recovery of the retail sector, concerns about rising inflation have impacted consumer behavior. While confidence in the UK economy has reached its highest point since February 2020 and many individuals feel optimistic about their household finances, 64% of consumers worry about increasing prices of everyday items. As a result, 42% have already made lifestyle changes, and 35% are more likely to seek value in their purchases. Additionally, 30% express concerns about the impact of inflation on the value of their cash savings, leading to 37% of Britons making cutbacks to ensure they can afford higher expenses during the upcoming Christmas season.
The strong performance of fashion and department stores in August indicates a positive trajectory for the retail industry as the effects of the pandemic continue to subside. With the return of in-store shopping and the surge in formalwear fashion sales, businesses in the sector can anticipate a more prosperous future. However, the concerns about rising inflation emphasize the need for retailers to adapt and offer value-driven options to meet the changing needs and expectations of consumers.
For more information on the UK fashion and retail industry, visit: UK Fashion Retail
To learn about consumer spending trends and economic outlook, visit: Barclaycard Payment Data
