UK clothing and sales volume growth has been robust year-to-date. Latest data from Kantar Worldpanel (to 24 Sept 2017) shows the market has improved marginally year-on-year (yoy) for the fourth year in a row. 12-week yoy growth at +1.5% is the strongest seen for around 2-years, although this is likely to have been boosted by favourable weather and previously weak same-store sales.

The year-to-date yoy growth in clothing retail sales has been highly dependent on the weakness of sales last year, when the weather was extremely unfavourable. Although it seems likely that weather conditions will be more befitting to the season for the start of the Autumn/Winter clothing-retailing season than last year, clothing retail sales weren’t all that weak in early autumn last year so the year-on-year comparison will not be as easy as it has been for Spring/Summer.

The Autumn/Winter season has appeared to be off to a strong start with the likes of M&S, Debenhams and Primark seeing better market share trends. Encouragingly, the data has shown improved sales of products at their full price, most notably at Next and M&S. However, this relatively positive backdrop looks to be fully reflected in bond prices. Pressure on disposable income appears to have returned in the near term (The Asda Income Tracker is broadly flat yoy), and with a low household savings ratio, it seems premature to expect a sustained improvement. Additionally, capacity growth continues and the overarching pressure from online retailers continues to strain the industry.

With October trends likely to be weaker, and the upcoming competitive pressures of Black Friday and Christmas trading, I would expect retailers to maintain some caution.

UK retail comparable sales get tougher over the next few months – winter is coming.

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