UK fashion market is losing speed, warns new report

Britons are expected to spend £1.4 trillion per annum by 2021, with growth of 17% expected over the next five years but fashion retailers are expected to face challenges as consumers increasingly prioritise spending on experiences and leisure activities.

According to a new report from Mintel, consumer expenditure rose by 3.7% in 2016 to reach £1.2 trillion despite political turmoil and concerns over rising prices. The majority of Brits are bracing for an expensive future ahead following Brexit with 83% worried about seeing price rises on goods and services.

"Following the UK's vote to leave the EU, there has been a great deal of discussion about how it will impact the price of goods and services. Mintel research underlines particular concern about the rising cost of in-home food, and inflation is undoubtedly going to squeeze household budgets. However, broader consumer confidence is still relatively strong,” said Mintel senior consumer lifestyles analyst Jack Duckett.

While the report reveals that the foodservice, personal finance, and leisure and entertainment categories are likely to flourish in the next years, it spells bad news for fashion and accessories retailers.

Sales of clothing, footwear and accessories are predicted to rise by just 1.9% this year – compared with 5.6% in 2015 and 2.4% in 2016. The slowdown is a result of more consumers prioritising spending on experiences over material possessions, a trend that is forcing many clothing retailers to quickly adapt to survive. Indeed, according to Mintel, the leisure and entertainment market outpaced the clothing market in 2016, rising by 3.2%.

Growth in the UK fashion market continues to be fuelled by the men’s fashion segment, which saw sales up 2.8% in 2016. Just 20% of men said they spent less on clothing and accessories over the past year, compared to 26% of women.

Consumers are also worried about the climbing cost of holidays and 53% of them said they will spend more time looking for deals and favour cheaper destinations.

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