Fashion struggled in wet June, despite clearance sale pricing

June was a tough month for the consumer sector in the UK both in terms of overall spending and specific retail spend, two monthly reports showed on Tuesday. 

The regular Barclays report showed consumer spending actually fell year on year, the first decline since February 2021, while the Retail Sales Monitor from the British Retail consortium and KPMG showed retail sales falling and fashion struggling.

Barclays said consumer card spending fell 0.6% year on year in June, which was significantly lower than the latest CPIH 2.8% inflation figure so in real terms the fall was much greater.

It said the colder weather early in the month hampered spending at clothing stores, but the combination of cooler temperatures and new TV releases such as ‘Bridgerton’ and ‘House of the Dragon’ boosted digital content (9.2%) and takeaways (4.4%).

Meanwhile, entertainment businesses performed well while pubs, bars and clubs saw modest year-on-year growth (up 0.5%), with the influx of sports fans watching the Euros outweighing the bad weather.

But clearly consumers didn’t feel the need to buy new clothing for these social events – even though it was likely that a large number of replica football shirts would have been bought by England and Scotland football fans.

However, given that spending on holidays abroad continued to grow, the chances are that these travellers will be investing in beach holiday items such as swimwear, accessories and other summer clothing before they leave. Unfortunately for retailers, they’re likely to be buying them at clearance sale prices rather than full price, with many stores having brought forward their end of season promotions.

In fact, in the accompanying Barclays survey, 39% of UK consumers said they’ve spent less than usual on summer products this year due to the weather, with clothes (55%) emerging as the most common cutback.

Karen Johnson, Head of Retail at Barclays, said: “Once again, our data demonstrates the undeniable impact that unseasonable weather can have on consumer spending. The sluggish demand at the start of June even caused some fashion brands to adjust their sales schedules, although I was pleased to see that the situation has since improved with the arrival of sunnier days.”

Those sunnier days came in late June, but they seem to have disappeared this month with plenty of rain so far, suggesting that sales of summer products in July may not be brilliant.

As for the specific retail sales report from the BRC and KPMG, total retail sales fell 0.2% year on year in June. They’d grown 4.9% in the same month last year. While the decline was better than the three-month average of -1.1%, it was much worse than the 12-month average of +1.5%.

Non-food sales fell 2.9% year on year over the three months to June and “non-food was in decline” for the month itself, although we’re not told by how much.

In-store non-food sales over the three months to June fell 3.7% year on year, against growth of 2% in June 2023, and online non-food sales dropped 0.7% although this was better than the 1% drop last June. 

The online penetration rate of non-food items also increased to 36.2% in June from 35.2% in June 2023.

Helen Dickinson, BRC Chief Executive, said: “Retail sales performed poorly in June as the cooler weather during the first half of the month dulled consumer spending. Sales of weather-sensitive categories such as clothing and footwear were hit particularly hard, especially compared to the surge in spending during last June’s heatwave. 

“Retailers remain hopeful that as the summer social season gets into full swing and the weather improves, sales will follow suit.”

Linda Ellett, UK Head of Consumer, Retail & Leisure, KPMG, added: “Retailers, who are running to stand still at the moment, having exhausted all of the levers they have at their disposal to cut costs and drive sales via promotions, will be looking to the new Government to boost the economy and confidence. The overall economic conditions may slowly be improving, but the health of the sector remains fragile, and action is needed now to help support this vital economic contributor – particularly around neglected areas such as business rate reform.”