UK fashion spend rises in March despite consumers tightening their belts - report
Consumers were socialising more actively last month, as well going on holiday, taking part in sports and working in their offices. And this seems to have spurred them to buy more fashion and sportswear.
Overall consumer card spending grew 17.7% in March compared to the same period in 2019, Barclaycard said on Tuesday. Britons took advantage of the sunnier weather and lifting of all remaining Covid restrictions to visit pubs, dine out, and refresh their wardrobes in preparation for the months ahead.
That said, retail sales specifically weren’t exactly impressive. The British Retail Consortium (BRC) also said Tuesday that sales growth in shops slowed as budgets were squeezed by inflation.
Sales for March actually fell 0.4% year-on-year on a like-for-like basis, the BRC/KPMG monthly monitor showed, and they were up only 3.1% in total, while confidence was weak.
The total figure was much lower than the 12-month average and down on the +6.7% seen in February. Given that March a year ago was a month of lockdown, that like-for-like figure is a worrying one and the BRC also said much of the growth in total sales was likely to have been accounted for by rising prices.
Prices among BRC members rose 2.1% in the year to last month — the biggest jump of its kind in 11 years.
Back with Barclaycard, it said spending on essential items grew 18.1% as people were forced to pay more for their petrol and supermarket goods in the face of surging inflation.
But the purchases they had some more control over – discretionary spending – also rose a healthy 17. 5%. In fact, spending at bars, pubs and clubs skyrocketed 41.7%, while entertainment spending grew 20.3%.
Barclaycard has moved to a three-year comparison given that the one-and two-year comparison periods were heavily affected by the pandemic.
While the company’s report talked a lot about consumers cutting back on luxuries and trying to make their budgets stretch further, it's clear that plenty of people still have enough money available to buy non-essentials.
Shoppers spent more at both clothing and sports & outdoor retailers – up 10.1% and 18.8%, respectively, compared to 2019.
A many as 18% are also buying products in anticipation of an April heatwave, with 24% of sun-seekers buying spring or summer clothing, and 8% buying sports equipment.
It's interesting that, despite travel restrictions having been lifted and consumers now able to holiday abroad, Barclaycard is predicting that the staycation boom is set to continue. This should boost spending in tourist towns and cities such as London, Edinburgh and coastal resorts.
But it's still unclear how overall spending will develop in the short and medium term as the company’s regular survey also showed that 91% of Britons feel concerned about the negative impact of rising bills on their household finances. That 2% higher than in February and 5% higher than in December.
Consumers are less optimistic about the future of the UK with positive sentiment here having fallen to 27%, its lowest level since January 2021 when Britain was in full lockdown.
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