Fashion sales in the UK experienced a strong recovery in February, as indicated by both the British Retail Consortium/KPMG sales monitor and the Barclaycard spending report. The retail sector, particularly clothing and footwear, received positive news from these two monthly studies. However, it’s important to consider that these figures are compared to February 2021, when the UK was under lockdown, and also against the last pre-pandemic month. As a result, they may not accurately reflect the current state of retail sales.
According to the BRC, total retail sales increased by 6.7% from January 30 to February 26 compared to the same period last year, where sales only rose by 1%. In comparison to February 2019, sales were up by 4.9%. Like-for-like sales, which exclude the impact of store openings and closures, increased by 2.7% year-on-year. However, this growth was lower than the three-month and 12-month averages.
Non-food sales saw a significant increase of 12% in total and 6.9% like-for-like in the three months leading up to February. Despite these positive figures, they were lower than the average growth over the past year. In-store sales of non-food items declined by 7.5% in total during the same period but increased by 3.1% in a two-year comparison. Online non-food sales fell by 28.4% in February compared to the same month in 2021, when online shopping was the only option due to the lockdown. However, in a two-year comparison, online non-food sales increased by 26.9%.
Helen Dickinson, Chief Executive of the BRC, acknowledged that the February sales growth was slightly dampened by Storm Eunice and falling consumer confidence. However, she highlighted that traditional try-before-you-buy products like furniture, home accessories, fashion, and jewelry continued to perform well as more people returned to stores. Dickinson noted that although online sales remained below last year’s levels, the pandemic has led to new spending habits, especially in non-food categories. She mentioned that four out of every 10 pounds are now being spent online compared to three out of every 10 before the pandemic. Additionally, Dickinson emphasized that the retail sector has undergone five years of digital transformation in just 24 months.
Paul Martin, UK Head of Retail at KPMG, added that retailers experienced continuous sales growth in February, with the clothing and footwear categories experiencing the highest growth. As restrictions were lifted and people returned to offices, consumer spending on these items increased.
In addition to the BRC/KPMG study, Barclaycard reported that consumer card spending grew by 13.7% on a two-year basis in February, marking the highest growth since November 2021. The easing of restrictions and encouragement for people to return to work and socialize led to increased spending on social activities, shopping, and travel. Although rising inflation affected income and grocery shopping became more controlled, there was an increase in spending on clothing and at pharmacy, health, and beauty stores. Department stores also experienced growth, with a 2.1% increase after two months of decline.
Despite higher inflation and energy prices, 41% of consumers were still indulging in small luxuries and treats as a means to uplift themselves. This included spending on new clothes, accessories, and beauty products. Consumers expressed less optimism about their household finances due to inflation, with 46% expecting it to impact their budgeting this year. However, 23% stated that they would spend more on experiences to create memories, which could benefit the fashion sector as new clothes and shoes may be required for these experiences, especially with the reopening of travel.
Useful links:
1. BRC News – UK Retail Sales Rebound in February
2. Barclaycard – February 2022 Consumer Spend Snapshot
