Rain dents fashion spend in May, but lipstick effect still visible

Consumer card spending and retail sales figures for the UK were both sluggish again in May, two key reports showed on Tuesday.

The regular monthly Barclays card spending figures showed spending growth slowing to a three-year low, despite consumer confidence being boosted by falling inflation.

In fact, May’s 1% growth in overall spending was the smallest since February 2021, Barclays said, as Britons cut back on discretionary purchases due to rising household bills and wet weather.

The report combines hundreds of millions of customer transactions with consumer research to provide an in-depth view of UK spending.

It told us that while card spending in general edged up, overall retail spending fell 0.4% – the biggest drop since September 2022. And clothing store sales fell a worse 1%.

However, pharmacy, health and beauty stores continued to defy the trend, rising 5%, owing to several factors including the ‘lipstick effect’, a growing interest in personal wellness, and the influence of viral make-up and skincare videos.

In possibly some brighter news for fashion and other weak categories, a Barclays survey also found that 28% of Britons will spend more when the weather improves this summer – a figure that rises to 39% for 18-34-year-olds. 

Meanwhile, the monthly BRC-KPMG Retail sales Monitor showed UK total retail sales rising 0.7% in the four weeks to 25 May. But it said non-food sales fell 2.4% year on year in the three months to May. 

And in-store non-food dales dropped 2.7% while online they rose 1.5%. 

Helen Dickinson, Chief Executive of the British Retail Consortium, said: “Despite a strong bank holiday weekend for retailers, minimal improvement to weather across most of May meant only a modest rebound in retail sales last month. Although non-food sales fell over the course of the month, the long weekend did see increased purchases of DIY and gardening equipment, as well as strong clothing sales. Retailers remain optimistic that major events such as the Euros and the Olympics will bolster consumer confidence this summer.”

And Linda Ellett, UK Head of Consumer, Retail & Leisure, KPMG, added: “Women’s and children’s clothing saw small increases in sales [and] after nearly three years, things may have turned a corner for online retailers, with year-on-year sales growth across most categories.”