In February, consumers in the UK spent less on clothing, but there was a surge in sales for jewellery and beauty products, thanks to Valentine’s Day. The British Retail Consortium (BRC) and KPMG reported a 5.2% increase in spending in retail stores compared to the previous year. However, this growth was lower compared to the 6.7% rise seen in February 2022. It is important to note that last year’s figures faced a difficult comparison to 2021. Despite the overall increase in sales, like-for-like retail sales only rose by 4.9% in February.
One crucial aspect to consider is that these figures do not account for inflation. With high headline figures and shop price inflation, the overall situation is not as positive as it seems. Although the value of sales may have increased due to price hikes, the actual volume of sales decreased. The report also highlighted a 3.2% overall increase in non-food sales and a 2.7% like-for-like increase in the three months leading up to February. This decline in non-food sales is concerning for the sector, especially considering that the three-month period included the traditionally busy month of December and the clearance sales of January. It is evident that consumers are prioritizing essential items over non-essential ones.
The data also revealed a recovery for physical stores compared to online sales. In-store non-food sales saw an 8.1% overall increase and a 7.3% like-for-like increase in the three months leading up to February. Although this growth is lower than the 12-month average of 10.8%, it is still better than the 3.1% decline in online non-food sales in February. Additionally, the report disclosed that the proportion of non-food items purchased online decreased to 38.5% in February, compared to 40.3% the previous year.
The BRC highlighted that sales in the health & beauty as well as the jewellery & watches categories continued to rise in February, likely due to the seasonal popularity of perfume and jewellery during Valentine’s Day. Footwear sales also experienced growth, but clothing sales declined. Unfortunately, specific figures regarding the increases and decreases were not provided.
Furthermore, data from Barclays showed a 5.9% year-on-year increase in overall consumer spending on payment cards in February, with Valentine’s Day once again contributing to the boost. However, there was a consistent trend of consumers focusing on essential purchases. This resulted in people opting for cheaper alternatives, shopping at discount stores, and delaying Easter-related spending. In fact, 30% of shoppers plan to reduce their overall Easter spending.
Due to high essential prices and increased heating costs, 58% of people have reduced their discretionary purchases. Barclays noted that spending on non-essential items saw a much smaller year-on-year increase of 5.5% in February, compared to 10.4% in January. Spending on clothing specifically experienced a decline of 1.2% on payment cards. Nevertheless, it is important to consider that last year’s figures may have been artificially inflated due to the end of pandemic restrictions.
Overall, the data demonstrates that 65% of shoppers who are cutting back on discretionary purchases are reducing their spending on new clothing and accessories. This highlights the ongoing challenges faced by the fashion industry and the shift in consumer priorities towards essential items.
Useful links:
1. Retail sales trends in the UK
2. Impact of Valentine’s Day on consumer spending
