View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. News
May 18, 2022

UK clothing spend to plummet as consumers feel the pinch of rising inflation

UK inflation hit a 40-year high this morning (18 May) at 9%, with experts warning clothing retailers will see demand sink as consumers prioritise spending on essentials.

By Hannah Abdulla

The hike in inflation means the cost of everyday items such as food, fuel and clothing will go up for consumers across the UK.

Free Whitepaper
img

What is the impact of historically high inflation on the UK consumer landscape?

The average UK consumer is experiencing a severe cost-of living crisis as inflation surges to a forty-year high and the price of goods continues to rise. This shock is the result of the sharply increasing costs of commodities, energy, and the ongoing conflict in Ukraine, and is threatening FMCG manufacturers, retailers, and foodservice operators’ ability to survive and grow. Inflation will have a profound effect on many consumer-facing industries in 2022 and beyond. Consult GlobalData’s new whitepaper, Inflation in the UK: The Impact of Historically High Inflation on the UK Consumer Landscape, to better understand shifts in consumer behavior and their impact on spending patterns, as well as the implications for UK businesses. This whitepaper covers:  
  • Why has global inflation returned with a vengeance?
  • What is the current inflation situation in the UK?
  • What impact is inflation having on UK retail sales?
  • What tactics are businesses relying on to tackle the effects of high inflation?
  • How are consumers changing their behaviors to cope with the higher cost of living?
  • Which industry sectors are most vulnerable to reduced consumer demand?
  • How is the government responding to high inflation?
  • How long will high inflation last in the UK?
  • How can your company survive and thrive in a high inflation environment?
Enter your details here to receive your free whitepaper and ready your business for these increasingly uncertain times.
by GD50 Custom
Enter your details here to receive your free Whitepaper.

And with the Bank of England forecasting inflation will continue to rise to 10% this year, the situation is likely to become even more strained in the coming months.

Speaking exclusively to Just Style, Pippa Stephens, apparel analyst at GlobalData, says: “With clothing and footwear prices continuing to rise, and the cost of living having also surged in recent months due to cost increases across necessities like energy and food, causing consumers’ discretionary income to be drastically reduced, many shoppers have been forced to cut back on purchases of non-essential apparel items.”

According to GlobalData’s monthly UK consumer survey conducted in April 2022, only 30.4% of UK consumers do not expect their clothing and footwear shopping habits to change as a result of price rises, whereas 32.1% stated that they will buy fewer items, and 13.1% will stop purchasing them altogether, emphasising the impact that increasing costs will have on the overall clothing and footwear market this year. 

“Consumers aged 16-44 expect their shopping habits to alter the most because of these increasing inflation rates, likely due to younger consumers generally being on lower incomes, meaning they will be harder hit by higher living costs, while intentions also differ strongly by gender,” Stephens adds. “More females cited that they plan to change their shopping habits, since men generally have a greater focus on essentials, whereas women tend to make apparel purchases more often to keep up with trends, which they can cut back on more easily now that prices have increased. 

“These shifting spending habits are partly to blame for the UK apparel market experiencing muted growth in 2022, and remaining notably below 2019 levels, and even then, only a small proportion of this growth is due to increased volumes, since inflation rates are so high.”

According to a report published by The Independent, charities have already reported increased sales of and demand for secondhand clothing in response to increased production costs driving high street fashion to its priciest levels since 1988 when records began.

The British Retail Consortium (BRC) explains higher energy prices along with a tight labour market, and the huge costs of moving goods around, are impacting all retailers.

A spokesperson for the BRC tells Just Style rising inflation and falling consumer confidence “is likely to hold back consumer spending on items like clothing.”

“Retailers through all sectors are seeing their costs rise – the fashion sector is no exception to that, seeing higher transport costs, increasing input costs of goods often imported from abroad.

“We are facing more difficult times ahead. Retail is a very resilient sector and we have confidence that clothing retailers will do what is necessary to ensure they can succeed. That might be by expanding affordable ranges of clothing or focusing on customer groups that are still spending on clothing. Obviously, the impact of inflation doesn’t fall equally on everyone, and it is likely the households that are struggling will be the ones that cut spending the most. “

Many clothing retailers have already confirmed they are likely to implement price increases across ranges as they look to pass on the cost.

Earlier this year, Next Plc warned of price increases as a result of higher cost of goods and increases in UK operating costs linked to wage inflation.

Meanwhile, Primark, which booked a surge in first-half sales, said while it has been able to broadly mitigate rising supply chain costs and inflation in raw materials during the first half due to a favourable dollar exchange rate and reduction in-store operating costs, the second half will see customers feel the effect of price increases on some of the autumn/winter stock due to inflationary pressure and the strengthening dollar.

“Brands will be looking at ways they can reduce costs,” the BRC spokesperson adds. “I’m sure some retailers will be absorbing some of the price rises themselves in order to protect their customers and that will no doubt help keep the demand up.

“It is a difficult time for the entire industry and with inflation set to top 10% later on this year, that situation is going to get harder. We will continue to see prices rise in all sectors of retail and we wait to see whether or not there will be action by governments and banks to help redress the situation.”

Related Companies

Free Whitepaper
img

What is the impact of historically high inflation on the UK consumer landscape?

The average UK consumer is experiencing a severe cost-of living crisis as inflation surges to a forty-year high and the price of goods continues to rise. This shock is the result of the sharply increasing costs of commodities, energy, and the ongoing conflict in Ukraine, and is threatening FMCG manufacturers, retailers, and foodservice operators’ ability to survive and grow. Inflation will have a profound effect on many consumer-facing industries in 2022 and beyond. Consult GlobalData’s new whitepaper, Inflation in the UK: The Impact of Historically High Inflation on the UK Consumer Landscape, to better understand shifts in consumer behavior and their impact on spending patterns, as well as the implications for UK businesses. This whitepaper covers:  
  • Why has global inflation returned with a vengeance?
  • What is the current inflation situation in the UK?
  • What impact is inflation having on UK retail sales?
  • What tactics are businesses relying on to tackle the effects of high inflation?
  • How are consumers changing their behaviors to cope with the higher cost of living?
  • Which industry sectors are most vulnerable to reduced consumer demand?
  • How is the government responding to high inflation?
  • How long will high inflation last in the UK?
  • How can your company survive and thrive in a high inflation environment?
Enter your details here to receive your free whitepaper and ready your business for these increasingly uncertain times.
by GD50 Custom
Enter your details here to receive your free Whitepaper.

NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. The top stories of the day delivered to you every weekday. A weekly roundup of the latest news and analysis, sent every Monday. The industry's most comprehensive news and information delivered every quarter.
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy
SUBSCRIBED

THANK YOU

Thank you for subscribing to Just Style