Fashion sales in the UK had a strong performance in April, but there are concerns that a slowdown may be on the horizon. According to the BDO High Street Sales Tracker (HSST), retail sales growth began to slow in the second half of the month, with disappointing online sales. While overall like-for-like sales increased by 44.9% compared to April 2021, non-store like-for-like sales only saw modest growth of 6.4%.
The fashion and lifestyle categories experienced an increase in total like-for-like sales compared to last year, while the homewares sector saw minimal growth of 1.1%. Fashion had the highest growth, with total like-for-like sales rising by 58.7% for the month. This growth can be attributed to a strong base from the previous year.
However, the BDO report suggests that the retail sector may be faltering in 2022. The first two weeks of April saw significant growth compared to the previous year, but the final two weeks had much lower rates of growth. This could be influenced by the fact that the UK was under lockdown in the first two weeks of April 2021, and consumer behavior was hesitant during the subsequent reopening period.
Several factors may contribute to the slowdown in growth. The reopening of stores in the latter half of April 2021 resulted in a higher baseline for comparison. Additionally, the traditional slowdown in discretionary spending over the Easter bank holiday weekend could have impacted sales. The ongoing cost-of-living crisis, lower consumer confidence, and high inflation are also contributing factors.
The minimal growth in online sales indicates a slowdown in discretionary spending. This poses additional challenges for retailers who are already dealing with strained supply chains. To maximize sales and meet customer expectations, retailers will need to maintain flexibility and resilience.
As interest rates rise in response to inflation, consumers may tighten their spending, potentially leading to a slowdown in the fashion retail sector. The coming months will be crucial in determining whether these trends continue or if there is a shift in consumer behavior. Retailers will need to adapt and respond accordingly to navigate these uncertain times successfully.
Useful links:
1. BDO High Street Sales Tracker
2. BBC: UK High Street sales growth slows in April – BDO
