Fashion falters in November as UK consumer spending stays weak
Consumer spending in Britain rose 3.3% year-on-year last month, its lowest growth since March when severe winter weather dented activity. But the retail sector “continued to face challenges with department store and clothing spending contracting by 7.1% and 2.9% respectively,” and average transaction value for clothing being flat, according to the latest Barclaycard report.
So what were consumers spending their money on? Well, entertainment was a key area (the Spice Girls reunion and Fantastic Beasts: The Crimes of Grindelwald helped ticket sales to climb 30.5% in November), but consumers stayed generally cautious despite that willingness to splash out on certain categories.
They certainly weren’t splashing out on womenswear, which fell 1.6%, while menswear was down a worse 3.2%. Family clothing dropped 4%, and shoe shops edged up only 0.1% (suggesting boot season may not have got fully under way yet as these items tend to cost more and push sales up).
Even sports shops saw their sales dropping 2.2%, even though the athleisure trend has turned sports shoes and clothing into everyday-wear.
Jewellers saw their sales down 5.2%, which means they didn’t benefit from the start of the gifting season (and the traditional start of engagement season).
But there was some good news. Cosmetics stores rose 3.3%, further highlighting the ongoing strength of the beauty sector, even in tough times.
None of the above is any surprise given that Barclaycard said only 52% of UK adults now say that they have confidence in their household finances – the lowest level it has recorded since 2015.
Barclaycard processes almost half of the UK’s credit and debit card transactions so its data can paint a fairly reliable picture.
It said consumers held off spending last month ahead of the festive season “and even the onset of the cold weather wasn’t enough to tempt shoppers to buy their winter wardrobes.”
The clothing spend fall was the biggest drop since October 2017, which was a historically weak month. Similarly, department stores and electronic stores saw major contractions, the latter down 4.9%.
Overall, it also said that non-essential expenditure saw a growth slowdown to just 2.9%, also the lowest since March. Only 40% of Britons said they feel confident in their ability to spend on non-essential items and 64% said they’re being careful to seek out value for money in the purchases they make - which makes it even more surprising that discount stores saw a 16.9% fall.
ANY HOPE FOR DECEMBER?
So what does this all mean for December? While Black Friday was again a much-hyped retail event, just 16% of consumers said they expect to spend less in December as a result of making Christmas purchases in the final week of November – indicating that many shoppers still plan to spend as usual during the festive period.
Esme Harwood, Director at Barclaycard, said: “November was a mixed month. It seems shoppers are yet to make their main Christmas purchases for friends, family and loved ones – despite many retailers offering Black Friday discounts to try and boost sales.
“This may be unsurprising, given we’ve seen consumer confidence in household finances fall to a record low, likely influenced by ongoing political and economic uncertainty. As the final countdown to Christmas begins, it will be interesting to see whether shoppers will be enticed back to the high street over the next few weeks”.
The British Retail Consortium/KPMG also released their November spending figures on Tuesday and these showed total retail spending (based on a different set of metrics) was up 0.5% in November, but was down by the same amount on a like-for-like basis.
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