Fashion struggled in April as consumers dealt with higher bills, say Barclays and BRC
UK consumer spending on payment cards grew last month, but a hike of 4.3% was pretty unimpressive at a time when headline inflation remains close to double-digits.
That’s according to cards giant Barclays, which said clothing sales actually fell for the third consecutive month, as consumers cut back on discretionary spending to cope with rising household bills.
This is despite the arrival of spring and the Easter Bank Holiday weekend fuelling growth at pubs and sports & outdoor retailers, which we might have assumed would boost consumer interest in buying new clothes for socialising and other activities.
The clothing sales drop was 2.3% and a separate Barclays survey showed that new clothes and accessories are among the key areas to be cut back on by Britons seeking to save cash. Some 60% of them said they’d rein in their fashion spend.
It’s an understandable attitude given that consumers are spending more on groceries (up 5.5% last month) while also looking for marked-down foods and taking advantage of money-off vouchers. They’re clearly prepared to make do with whatever is already in their wardrobes.
The Barclays figures came on the same day that the latest BRC-KPMG monthly monitor reported retail sales (rather than total consumer spending) rising 5.1% in April, compared with a 0.3% decline this time last year. But again, despite the higher spending, inflation had an impact and shoppers actually bought a lower volume of goods.
In the BRC report, food stores’ sales rose 1.2% in the three months to April as fashion retailers, in particular, struggled.
BRC chief executive Helen Dickinson said: “Clothing sales underperformed as the poor weather left customers thinking twice before decking out their summer wardrobe.” But she added that “a boost to overseas tourism over Easter helped jewellery, watches and cosmetics”.
Back with the Barclays report, overall, spending on non-essential items saw higher year-on-year growth in April (4.6%) than in March (3.5%). This meant spending at sports & outdoor retailers edged up by 0.6% in April vs a drop of 4.5% in March.
But there may be some good news for the fashion sector in the fact that Britons are still keen to book holidays to look forward to later in the year, with spend on airlines rising 32.1% year-on-year – a slight uplift compared to March (28.5%).
And despite them seeking ways to save money on their overall spending, consumers are also feeling noticeably more confident in their household finances and ability to spend on non-essential items (67% and 56%, respectively), compared to last month (59% and 48%).
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