Barclaycard says fashion slump dents UK consumer spend
today Oct 8, 2019
The consumer spending picture in the UK is getting worse and worse, and fashion is partly to blame. While the overall year-on-year figure was up 1.6%, according to the latest figures from Barclaycard, that figure lagged inflation so in real terms, spending was down in the period from August 18 to September 21.
Some spending categories saw rises, although again, this wasn’t always enough to beat inflation. Essential expenditure rose slightly (1.1%), although supermarkets saw only muted growth. Spending on nights out was up too so consumers were clearly prioritising experiences, and spending on digital content and subscriptions grew by 9.8%, demonstrating the rising popularity of online services and streaming subscriptions.
But retail spending struggled, with clothing down as consumers spent less than usual on their autumn wardrobes.
Barclaycard processes nearly half of the UK’s credit and debit card transactions so it’s a good gauge of how spending has fared.
So what exactly went wrong on the fashion front last month? The company said that clothing spend was down as much as 3.9% and 34% of consumers confirmed they were “spending less than normal on autumn clothes this year.”
Maybe they simply didn’t feel the motivation to buy knits, coats and ankle boots when the weather stayed warm. Or perhaps the heavy rain that also occurred in some parts of the country simply dented their appetite for shopping.
Whatever the reason, it’s bad news for fashion retailers at the start of what should be their biggest season and means a lot of in-store autumn inventory will need to be shifted at a discount as new drops arrive.
Barclaycard said too that household retailers, which include DIY, electronics and furniture stores, struggled with a 1.2% year-on-year decline.
And overall consumer confidence remained low in September, with just 29% of UK adults feeling positive about the state of the UK economy. Some 41% felt actively pessimistic about their ability to spend money on discretionary items – 5% more than in August – and 51% were worried about the rising cost of everyday items impacting their buying power.
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