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Jun 9, 2020
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Discounts didn't help UK fashion retail in May say Barclaycard, BRC

Published
Jun 9, 2020

May was another month of contracting consumer spend, two new reports have shown. UK consumer spending dropped 26.7% year-on-year in May, Barclaycard said on Tuesday. But it added that “positive signs are seen as more sectors adapt to social distancing restrictions to keep their doors open”.


Low prices didn't help fashion last month



And the British Retail Consortium/KPMG said total UK sales fell 5.9% with the 15-fold growth in online retail unable to make up for the closure of physical shops.

Barclaycard said that while spending on essential items grew by 0.9%, helped by a 24.5% rise in supermarket spend, non-essential categories didn’t fare so well. Spending at non-essential retailers was down 36.9% compared to May 2019. However, the fall was much less steep than the 47.7% plunge seen in April. But the fall still came despite some giant discounts being offered by fashion retailers.

And department stores (or at least their web operations) fell more sharply than the overall non-essential sector with a 44.5% drop, while clothing fell 42.4%.

Barclaycard also said that online purchases at specialist retailers – including sports and outdoor outlets – rose 95.3% “as people bought items to help them exercise and keep fit while gyms remained closed”. In fact, sports stores rose 96.3% and outdoor stores 85.8%.

Meanwhile, the BRC/KPMG report said the May fall was the second-worst ever (the top prize on that front going to the plunge during April). Online sales accounted for nearly 62% of all spending in May, down from 70% in April. Given increasing fears over the virus during February and March, online also represented a bigger chunk of sales in those months too. The usual percentage is around 20%.

Overall, sales of clothing, footwear, jewellery and beauty were all down, according to this report, with KPMG’s UK head of retail, Paul Martin, saying that non-essential categories “especially fashion, continue to attract limited demand, which will increase the pressure on them in the coming months”.

And Barclaycard added that despite some encouraging signs, overall confidence in the UK economy remains low, “indicating that the road to recovery may be a long one”. Barclaycard’s research showed only 20% of UK adults feeling positive, but those aged 18-34 are noticeably more upbeat than those aged over 35.

But adults seem to feel more upbeat about their own finances with 67% feeling this way and 37% saying they have enough savings to support them, which is a key reason for their positivity. 

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