A newly released report by RSM, a well-known tax, audit, and consultancy firm, reveals concerning news for the UK fashion industry this holiday season. According to the study, it is predicted that around 50% of UK consumers will reduce their spending on fashion due to the ongoing cost-of-living crisis. Last year, the average Christmas spend per person was £554, but this year it is projected to drop significantly to £463, marking a 16% decrease.
The report, which surveyed 1,000 consumers, also discovered that nearly half of the respondents (49%) plan to cut back on clothing expenses during the festive period. In addition, spending on toys, presents, and stocking fillers is predicted to decline by 43%, 42%, and 40%, respectively.
It seems that the decline in fashion spending can be attributed to the fact that consumers are planning to reduce their spending on social activities this Christmas. With fewer opportunities to socialize and attend events, there is less need for new clothes. Furthermore, when asked about recent cutbacks in the past three months, the top three responses were reducing energy usage (45%), cutting back on eating out (41%), and ordering fewer takeaways (34%) – clearly indicating that consumers are looking to save money wherever they can.
Another alarming finding from the survey is that 37% of respondents admitted to having no money left at the end of each month after covering essential expenses such as food, energy, and household bills. With 83% expressing concerns about the cost-of-living crisis, it is evident that consumers’ finances have been severely impacted.
Jacqui Baker, RSM UK’s head of retail, commented on the survey results, highlighting that consumers are being forced to tighten their belts due to financial strain. This has had a significant impact on fashion retailers, as footfall has been decreasing in recent weeks. Moreover, strikes in the transportation and mail sectors have disrupted delivery times, discouraging customers from making purchases.
Paul Newman, RSM UK’s head of leisure and hospitality sector, emphasized the crucial nature of the upcoming festive period for businesses in the hospitality sector. Usually, this is when they generate a majority of their profits for the year. Considering the impact of the Omicron variant on last year’s celebrations, it is essential for the sector to have a successful 2022 in order to avoid a grim start to 2023 with potential closures and job losses.
In conclusion, the report sheds light on the challenges faced by UK consumers and the subsequent impact on fashion spending this Christmas. It underscores the need for retailers and businesses in the hospitality sector to adapt to changing consumer behavior and economic conditions. By doing so, they can mitigate the potential downturn in sales and revenue.
