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How well, you might be wondering, is the UK fashion sector continuing to cope amid the cost and supply chain pressures that are presently being felt by us all?
The short answer is, according to at least one source, better than one might have feared. However, there can be no doubt that many retailers up and down the UK are still facing major challenges in their efforts to survive and achieve meaningful growth.
Retailers struggling to find positive signs
First, some bad news – and there was sadly a fair bit of it to be found in the most recent BDO High Street Sales Tracker (HSST).
The month of June 2022 saw the most modest like-for-like (LFL) sales growth since February 2021. Sophie Michael – head of retail and wholesale at BDO – pointed to such worrying factors in this as historically low levels of consumer confidence, a 20-year-low in real wages, and expectations of further increases in interest rates.
In such circumstances, retailers might hope to at least see political stability and a clear sense of direction from the government to allow for these issues to be tackled. However, even the prospects of this seem bleak – at least for now – amid Prime Minister Boris Johnson’s resignation and an impending Conservative Party leadership battle that might not conclude until the autumn.
Looking to the actual statistics in the report, they might initially seem to be almost encouraging. In fact, total LFL sales – including those both online and in brick-and-mortar stores – went up by 8.4% compared to June 2021. However, this was actually the slowest increase for 16 months, and it is believed that inflation accounted for much of the rise.
Furthermore, total non-store LFL sales were a mere 1.6% higher during June. This was at least the third positive result in a row for the online retail sector; however, given that even June 2021 saw fairly modest growth of 8.2%, it is a very disappointing outcome. It does, though, illustrate to some extent how enthusiastically consumers have embraced a return to high-street shopping.
So, what role did fashion play in supporting the health of UK retail?
The aforementioned increases were significantly fuelled by the fashion sector. Total LFL growth of 15.2% was recorded for fashion during June, compared to a 73.7% increase at this point in 2021, the latter inspired by fashion retailers reopening their stores with the lifting of the final coronavirus lockdown.
Sophie Michael suggested that the fashion sector had “undoubtedly been boosted by consumers refreshing their wardrobes for summer holidays.” She warned, however, that an 8.8% drop in sales for the homewares category, and the generally weak figures for online sales growth, were “key indicators that consumers are tightening their purse strings on discretionary spend and in particular on big-ticket items.”
In short, then, the challenges remain very real for even the sectors that emerged as the greatest beneficiaries in BDO’s latest sales tracker, and fashion is certainly not immune to sustained pressures from the wider world.
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