Fashion has bad month as spending falls

UK consumer spending on debit and credit cards rose in March but by much less than the 9.2% headline rate of inflation, so in real terms, spending fell.

That’s according to the latest monthly Barclays report that said Britons were making “further cutbacks to cope with the cost-of-living crunch”.

They increased their spending in some areas but sadly, fashion wasn’t among them.

In fact, clothing stores saw their steepest year-on-year decline in six months (down 3.4%) in March, with 54% of consumers saying they’re cutting down on discretionary spending, and 63% saying they’re especially cutting back on new clothes and accessories.

Groceries got a 7.1% boost but that, again, was well below the rate of inflation specific to this category (18.2%). And spending on utilities rose 39.3%, as the cold weather persisted into March and households kept their heating on.

Of course, groceries and heating are must-haves. But aside from the things they had to buy, what were UK consumers choosing to spend their spare cash on? Digital content & subscriptions saw its highest growth since October 2022, thanks to the latest instalments of TV shows such as Succession and Ted Lasso. That’s another sign of consumers staying home rather than socialising

And home improvement and DIY stores enjoyed a month-on-month rise of 4.3%, as more consumers started to spruce up their homes and gardens in preparation for the warmer months.

Meanwhile, the ‘other specialist retailers’ category was up 3.5%, its strongest performance since April 2022, thanks to increased spending at florists and card shops for Mother’s Day. However, this year’s figures have been inflated because Mother’s Day fell in a different reporting period last year, so the growth is unlikely to carry over into next month.

Barclays also said that Gen-Z consumers are spending higher proportions of their income on discretionary purchases compared to those aged over 25. Gen Z may have less cash overall but while on average, they spend 41% less than older groups on essential items, their spending on non-essential items is only 21% lower. This is perhaps because they’re more likely to live with parents, and therefore have fewer responsibilities when it comes to essential spending.

That means they’re likely to devote a bigger proportion of their cash to discretionary categories like fashion and beauty, as well as more socialising, which might also spur further fashion and beauty buys.

Fashion has bad month as spending falls

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