Forecasts for the UK fashion retail sector are presenting a mixed outlook, with both positive and negative news emerging. Recent consumer research suggests that the anticipated retail recovery may be delayed until late summer. However, studies indicate that despite clothing shopping not being a top priority for consumers, there is still a demand for new clothes, accessories, and beauty products and treatments for activities such as holidays and weddings.
The EY Future Consumer Index reveals that there is significant pent-up demand for spending, but consumers remain cautious about the reopening dates for non-essential retailers in April. This caution is largely tied to the vaccination rates in the country. The survey shows that even though the most vulnerable individuals have been vaccinated, 55% of respondents stated that they would only feel that life can return to normal once everyone has been vaccinated. Additionally, 59% stated that they would avoid touching items while out and about until widespread vaccination is achieved.
EY predicts that the full return to normal consumer behavior will occur later in the summer, when most of the population has been vaccinated. The report advises retailers to prioritize measures that alleviate consumer anxiety about shopping in person, with a specific focus on hygiene. On a positive note, EY highlights the importance of the physical store and the ability to engage with customers in person, emphasizing the potential power of these factors.
Meanwhile, research conducted by Scottish Friendly and the Centre for Economics and Business Research (CEBR) suggests that fashion shopping is not a top priority for consumers. The study forecasts a shopping spree worth £50 billion following the lifting of lockdown restrictions, with households planning to spend approximately 26% of the savings accumulated during the pandemic. However, the Bank of England has suggested that only 5% to 10% of these savings may actually be spent.
The study, which surveyed 4,000 adults, reveals that 34% plan to take a foreign holiday, while 29% intend to go on a domestic trip as their top priorities. Many also expressed a desire to eat out more frequently, with 19% looking forward to visiting pubs and bars. Although new fashion items may not be necessary for these activities, a significant portion of respondents (over 20%) expressed their intention to purchase clothing, while 18% plan to spend on beauty products and 29% on personal care, such as haircuts.
The findings suggest that there may be increased demand for holiday clothing, going-out styles, occasionwear, and bridal attire. The research also highlights that approximately 150,000 weddings were postponed last year, and 73% of these couples intend to spend the money they had originally allocated for their weddings in 2020 once restrictions are lifted in late June. The National Wedding Show and Confetti conducted this research and also found that 73% of these couples are planning to go on a honeymoon once it becomes possible.
In conclusion, the forecast for the UK fashion retail sector includes both positive and negative indicators. While the retail bounce-back may be delayed until late summer, consumer spending priorities on activities such as holidays and weddings are expected to drive demand for new clothes, accessories, and beauty products. Retailers will need to address consumer concerns about shopping in person by implementing measures to ensure hygiene and safety. Despite fashion shopping not being at the top of consumers’ to-do lists, there is still a significant number of individuals planning to make clothing and beauty product purchases. The potential surge in demand for holiday clothing, occasionwear, and bridal attire presents an opportunity for the fashion retail sector. Overall, the recovery and revival of the sector will depend on how retailers adapt to meet changing consumer preferences and instill confidence in in-person shopping experiences.
Useful links:
1. https://www.ft.com/content/0815b449-783e-4089-b15f-782beabdf052: This article from the Financial Times provides further insight into the current state of the UK fashion retail sector and the challenges it faces.
2. https://www.bbc.co.uk/news/business-56683942: This BBC News article delves into the consumer spending patterns and the impact on the UK economy, including the fashion retail sector.
