Clothing & footwear volumes declined 0.8% * in 2017 and will not grow again until 2019, says leading data and analytics company GlobalData. Increased manufacturing and import costs, stemming from the prolonged weakness of the pound, led to a sharp 2.4% * hike in inflation last year which proved a hindrance to volume growth as higher prices were passed on to consumers.
While inflation is forecast to soften this year, budgets will remain under pressure and shoppers will still be unable to afford further price hikes, minimising the opportunity for volume recovery – with consumers’ appetite for purchasing further weakened by poor weather in Q1. That said, inflation will soften out to 2023, helping to support volumes, despite a shift to more cautious spending.
Mamequa Boafo, Senior Retail Analyst at GlobalData commented, “The prioritisation of leisure spending and preference for experiences over ‘stuff’ will see consumers shopping from their own wardrobes this year, utilising what they have already and only buying clothing items they can truly justify spending money on. However, forecast growth in online clothing & footwear is high at 10.8% * for 2018, second only to the health & beauty sector. As store footfall remains weak, maximising online opportunities to drive sales and customer acquisition is vital – with multichannel players needing to invest to keep up with online pureplays such as ASOS andboohoo.com which continue to set the standard in fulfilment and online shopping experience.’’