Squeezed Britons tighten belts, but fashion and beauty still on shopping list
There was good news and bad on UK spending on Tuesday as two reports showed that British consumers are being impacted by the rising cost of living, but they're still spending on fashion and on activities that mean they're likely to buy new clothes and beauty products.
The regular retail monitoring report from the British retail Consortium and KPMG showed total sales fell in April by 0.3% year-on-year. That was the first decline in 15 months and came despite rampant inflation. Like-for-like retail sales also dropped by 1.7%.
The biggest casualties were any retailers selling big-ticket items. But consumers seemed to be continuing their gardening obsessions developed during the pandemic and – importantly – fashion also saw stronger sales.
This was most noticeable in the occasionwear area that had previously been devastated by lockdowns. It's clear that consumers are embracing the new freedom to attend weddings, go on holiday and go to other social events.
That picture was also supported by the latest figures from Barclaycard.
They showed consumer card spending rose 18.1% compared to the same period in 2019, the highest uplift since October 2021.
TRAVEL SPENDING = NEW CLOTHES
The travel sector was a big factor in this and although spending is still lower than it was before the pandemic, it's recovering and holiday plans mean consumers also going to be buying holiday wardrobes too.
People are spending less in many categories — both essentials and non-essentials — as they trade down to cheaper options while spending on utilities per customer grew almost 29% as gas and electricity bills went through the roof. They’re also economising on their use of expensive items such as their cars with spending on fuel rising but by less than seen in March, suggesting people are taking fewer car journeys.
Looking in more depth at the spending on travel and social activities, spending on hotels, resorts and accommodation rose 16.6% compared to three years ago, while travel agents and airlines declined but by just 3.5% and 9.9%, respectively.
Some 21% of Britons are making social or holiday plans for the long weekend in June to mark the Queen’s Platinum Jubilee. And 17% are spending more on special occasions (such as weddings and hen/stag dos) and holidays this summer, to make up for lost time over the last two years.
The point about this for the fashion and beauty sectors is that among this group, some of the most popular purchases are new clothes and accessories (27%), and beauty products such as fake tan and make-up (13%).
This behaviour was reflected in retail spending – clothing saw a 12.6% uplift in April, higher than March’s 10.1%, while department stores returned to growth (+1.3%) after seven months of decline, and pharmacy, health, and beauty stores also saw an improvement (+20.2% vs +18.8% last month).
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