‘Revenge spending’: fashion demand defies cost of living crisis | Retail business

0

AAs the cost of living crisis intensifies, UK buyers are cutting their budgets in almost every area. But there is one notable exception – money being spent on clothes is above pre-pandemic levels, with the return of weddings, vacations and socializing fueling a boom in “revenge spending” or the purchase of those treats missed during months of pandemic shutdowns.

Shoppers are spending almost a fifth more on clothes than a year ago, according to research by Kantar for the Guardian, taking the value 1% ahead of the 2019 figure.

Resilient demand for fashion, footwear and beauty products defies expectations of a slowdown in non-essential spending, despite squeezed cash due to rising energy bills and food and transportation costs .

Footwear was the fastest growing non-food category last month, according to British Retail Consortium data released this week, with clothing ranking third behind health and beauty. In contrast, sales of almost all other non-food items fell, including toys, technology and household goods.

“People appreciate that bit of escapism,” said Andy Saxton, fashion director at Kantar. He suggested saving money on workwear, where spending had fallen by almost a quarter from pre-pandemic levels, and instead going on items with more flexible use , from t-shirts to dresses, which could be worn for social occasions and more casual office attire.

The reopening of high streets, which has made it possible to try on more fitted clothes, such as jeans and bras, and to make shopping a more social occasion, has led to a sales surge for UK market leader Primark, which did not have an online store. during confinements. Sales jumped 81% in the 12 weeks to May 28 and were up 4% from 2019 levels.

Marks & Spencer, Spanish chain Mango and online specialists Boohoo and Asos have seen customer spending continue to climb.

“Fashion is still profiting from the online boom and revenge spending,” said Kayla Marci, market analyst at fashion research and advisory group Edited, referring to the industry term for the moment where people spend more after a negative event.

Part of the reason revenue has returned to pre-pandemic levels is because everything costs more. Kantar found that the volume of apparel items sold fell by about 8%, while the average price paid for the items increased by 9%.

However, Saxton said the increase in spending was not just due to inflation, but also because shoppers were choosing better brands. “People are making more thoughtful purchases. Impulsivity decreases. People want more control over where their money goes and it needs to go further.

He said shoppers were looking for fashion that “was going to last a little longer” and that they wouldn’t have to replace “in the next few months”.

This matched research conducted by the John Lewis chain in May in which 37% of shoppers surveyed said they were looking for versatile clothing to make their money work. The department store said it hadn’t noticed any recent declines in sales in any fashion category. Socializing clothes have proven to be particularly popular, with 55% of respondents saying they intend to invest in such clothes.

“We’ve not only seen an increase in sales for entry-level prices, but also for premium products that customers know they’ll be able to use again and again,” said Beth Pettet, buyer for John Lewis.

According to Kantar, the overall market is also being supported by strong sales of essentials, such as underwear, sleepwear and socks, with spending in these areas up 10% from pre-war levels. pandemic. Again, this is partly because of the higher prices. The cost of cotton has been volatile and underwear prices have been among the biggest risers at 21% more than in pre-pandemic years, according to Edited.

Demand for activewear also remained strong as lifestyle changes made during the pandemic continued. Spending is 3% higher than in 2019. Sneaker sales are up a fifth as casual shoes become more the norm, but smart shoe sales are down.

Outfit purchases for weddings and parties are also on the rise, with spending now 1% higher than pre-pandemic levels and 165% higher than last year, according to Saxton. “A lot of people look through their wardrobe and realize it’s been over two years since they last wore an outfit and they need a wardrobe refresh.”

Spending on vacation gear is more than triple that of last year, but still nearly a fifth below pre-pandemic levels, Kantar found.

Pippa Stephens of research group Global Data said a shift to more casual dress in the workplace was likely to reduce trade for suit and shirt makers. She suggested supermarkets and stores such as Primark and perhaps Marks & Spencer would likely benefit from the focus on the essentials.

Younger shoppers have been found to reduce their spending much more, according to Stephens, a change that would affect fashion-forward retailers and online specialists more.

“Most have lower incomes or have young families to support. Older shoppers’ incomes are less affected and they focus on more classic items which they are less likely to discount,” she said.

However, the state of apparel sales in the retail market is expected to become much more difficult in the coming months.

Saxton suggested that the autumn and winter fashion season was likely to face difficulties as inflation continued to reduce purchasing power in the UK and the supply of clothing was hit by difficulties in production in China and other countries where Covid shutdowns have led to factory closures and delays at ports.

Retail analyst Natalie Berg said “the worst is yet to come” in terms of consumers cutting back on fashion spending. It would be “especially in October, when we have to turn our heating back on and the prospect of even higher energy bills hits us”. She said, “It keeps retailers up at night.”

Share.

Comments are closed.