Fashion proves strong in February as sales rise say key monthly studies
Two monthly sales reports on Tuesday showed that UK retail sales and general consumer spending are continuing to recover. The British retail Consortium/KPMG sales monitor and the regular Barclaycard spending report both offered some encouragement to the retail sector, especially as clothing and footwear appeared to be among the strongest categories during the month.
That said, the annual comparisons were fairly easy given that in February 2021, the UK will still under lockdown. And it's worth noting that the two-year comparisons are against the final pre-pandemic month. That means looking at two years ago will be less useful as a barometer of how retail sales are faring when the March figures come out next month.
Back to February’s performance, the BRC said that from January 30 up to February 26, total retail sales rose 6.7%, having risen only 1% this time last year. Compared to February 2019 they were up 4.9%. UK like-for-like sales rose 2.7% year-on-year, although this was worse than the three-month and 12-month averages.
While like-for-like food sales rose only 0.1% in the three months to February, non-food sales rose 12% in total and 6.9% like for like. While these figures look good, they’re lower than the 12-month average growth. On a two-year comparison, in the three months to February in-store sales of non-food items actually declined 7.5% in total although they increased 3.1%.
Online non-food sales fell 28.4% during February, compared with growth of 82.2% February 2021 when consumers had little option other than buying online due to the lockdown. On a two-year comparison, online non-food sales increased 26.9%.
Helen Dickinson, the BRC’s Chief Executive, said: “February saw continued sales growth, although dampened by Storm Eunice and falling consumer confidence. Traditional try-before-you-buy products, like furniture and home accessories, as well as fashion and jewellery, continued to be the high-flyers as more people returned to stores. While online sales remained down on last year, the new spending habits driven by the pandemic have settled into a new normal, particularly for non-food, with four in every 10 pounds now spent online compared to three in every 10 before the pandemic. Retail has driven five years’ of digital transformation in 24 tumultuous months.”
Paul Martin, UK Head of Retail at KPMG, added: “Retailers saw continued sales growth on the high street in February. Clothing and footwear categories witnessed the highest growth, most double-digits in February as restrictions were lifted and consumers re-stocked wardrobes, heading back to offices and embracing life living with Covid.”
BARCLAYCARD CONSUMER SPENDING
Meanwhile, Barclaycard said that consumer card spending grew 13.7% last month on a two-year basis, the highest growth since November last year. That came as the end of Plan B restrictions and guidance for people to work from home encourage more socialising, shopping and travel plans.
Consumers appeared to control their weekly grocery shop as rising inflation hit their income with the company saying that supermarket shopping saw its lowest increase since February 2020.
But the return to offices and that increased socialising allied with pent-up demand saw clothing spend rising 15% and spending at pharmacy, health, and beauty stores was up 13.9%.
It was significant that department stores also returned to growth with an uplift of 2.1% after two months of decline during December and January.
The increases come as 41% of consumers said that they're still purchasing small luxuries and treats to give themselves a boost despite higher general inflation and surging energy prices. As many as 23% of these consumers said they bought new clothes and accessories and 18% spent on beauty products, with this figure rising to 26% for women.
Consumers are less optimistic about their household finances at the moment with a figure of 63% compared to January 68% as inflation kicks in. As many as 46% of consumers expect inflation to affect their household budgeting this year. And while 23% say they will spend more on experiences to create great memories and less on physical items (rising to 37% for those aged between 18 and 34), that isn't necessarily bad news for the fashion sector. They'll need new clothes and shoes for those experiences in many cases, particularly if the experiences include going on holiday as is likely this year now that travel is reopening.
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