Shoppers shun fashion in damp April say retail reports

The reports that have come out so far about UK retail sales for April haven’t been remotely encouraging. So what did two key releases on Tuesday show? Mainly more of the same, unfortunately.

The Barclays consumer spending report (which covers all consumer spending rather than just retail) and the BRC-KPMG report that’s all about retail sales showed fashion in the doldrums last month. But at least beauty kept its head above water.

First that Barclays report. It said that spending on retail and restaurants slowed in April, although it added one upbeat note in that “consumer confidence in household finances reached [a] 28-month high”.

The main takeaway of the data is that “the cold and wet weather hampered retail, which saw its first decline since September 2022, yet pharmacy, health & beauty stores continued to benefit from the ‘lipstick effect’.”

Overall consumer card spending slowed to 1.6% growth in April, down from 1.9% in both March and February, and well below the latest CPIH inflation rate of 3.8%.

The wet and windy April put big pressure on retailers. Specific retail spending contracted by 0.1%, marking the first month of decline for the category in around 18 months, as in-store shopping was hampered by April’s cold snap. Face-to-face retail (excluding groceries) fell by 2.5%, and clothing sales dropped by 2.1%. If we also take rising prices into account, the fashion sector decline was even bigger than that 2.1% figure suggests.

However, as mentioned, pharmacy, health & beauty retailers bucked this trend, seeing a 4.9% increase, boosted by a number of macro factors, such as the ‘lipstick effect’, the wellness boom and viral make-up and skincare videos. It was particularly encouraging that the category managed to outstrip inflation.

Despite the overall slowdown in spending growth, Britons’ confidence in their ability to manage their household finances reached its highest level since November 2021, at 71%. Consumers’ confidence in their ability to live within their means also improved, increasing by two percentage points month-on-month to 74%. Importantly, confidence in their ability to spend more on non-essential items reached 56%, up from 55% in March.

One plus point for summer fashion and beauty spending is that travel agents had another positive month, once again rising 7.1%, as holidaymakers booked summer getaways. Some 32% of consumers say they’re prioritising holidays abroad over staycations this year, suggesting that they will be buying summer dresses, swimwear, sun hats, suncream and more over the next few months.

In fact, while fashion has previously been a major area that consumers are planning to cut back on, at the moment home is the area in which they seem to be reining in their spending.

In the Barclays survey, some 40% said they won’t be spending on their home or garden ahead of the summer.

Now for the BRC report. It spoke of “dismal weather, disappointing sales”.

But it wasn’t only the weather that was to blame as the timing of Easter had an impact as it so often does during March and April.

This year, the run-up to Easter was in March, while last year the run-up was in April. This calendar change distorts the year-on-year sales comparisons – with results artificially higher in March and lower in April.

UK Total retail sales fell by 4% year on year in April, against growth of 5.1% in April 2023. This was below the three-month average growth of 0.5% and the 12-month average growth of 2.2%. But when correcting for the distortion created by the earlier timing of Easter, the average growth for March and April together was 0.2%. Even though that growth was positive, it was tiny and didn’t go anywhere near to making up for inflation.

In-store non-food sales over the three months to April fell 2.4% year on year, against growth of 3.9% in April 2023.

And online non-food sales fell by 5.5% year on year, against a decline of 3.6% in April 2023. This was steeper than the three-month and 12-month declines of 3.5% and 3%, respectively.

BRC chief Helen Dickinson said: “Dismal weather and disappointing sales led to a depressing start to spring for retailers, even accounting for the change in timing of Easter. People delayed typical spring purchases despite retailers’ attempts to entice customers with heavy discounts. A dull, wet April dampened sales growth for clothing and footwear, especially outdoor sportswear.”

And Linda Ellett, UK Head of Consumer, Retail & Leisure, KPMG, added: “Health, beauty and personal care sales remained resilient categories. Online and high street sales across categories that can be delayed, including clothing and footwear, remain subdued as no one is rushing out yet for summer clothing.”