Britons to cut fashion spend, young cite sustainability concerns - PwC report
today May 20, 2019
The fashion retail sector is already reeling from the impact of the shift online and Brexit, so a new PwC report showing that all consumers, but especially the young, are set to cut their spend on clothing and accessories will come as a fresh blow. And it seems that those in the middle of the market, as well as fast fashion specialists, could suffer the most.
PwC said that consumers below the age of 45 are to rein-in their fashion spend, but those between the ages of 18 and 24 are being particularly cautious with 28% of them set to reduce fashion buys more than any other area of their discretionary spend. That's the largest percentage of any age group.
Based on a survey of 2,000 consumers, it’s the first time in the history of the regular study that clothing has come out as the top category for spending reductions in the 12 months ahead.
The analysts said that this could “potentially put a break on the rapid growth of both online and store-based fast fashion retailers.” And the fact that the findings come even though consumer sentiment has improved for almost every age group (with Brexit uncertainty abating since last year), makes consumers' decisions to reduce their outlay on fashion even more worrying.
Overall, there was a slight improvement in consumer sentiment since December: marginally more people think they will be better off in the next 12 months than worse off, reflecting low unemployment, real wage growth and low interest rates. This is an improvement compared with results from both Christmas and April 2018, and is “significantly stronger” than at any time since the last recession.
And PwC said that there’s a growing divergence between different age groups, with young people more positive than they’ve ever been, while 45-64 year-olds are now more negative about their outlook than the over-65s.
Brexit uncertainty is affecting fewer consumers compared with the results of the December survey, possibly influenced by the fact that it has been an issue for almost three years now and the uncertainty has become almost ‘normal’. Nevertheless, more than two in five young people, Londoners and those living in Northern Ireland, say that they will reduce their spending or postpone big-ticket purchases due to the proposed EU exit.
But consumers in general are planning to spend more money on groceries, home improvement and going out.
Lisa Hooker, consumer markets leader at PwC, said: “It’s interesting to see that for the first time ever in our survey, clothing has emerged as the number one area for reducing spending for those aged under 45. This is particularly as consumers’ appetite for this category has supported the rapid growth of fast fashion retailers, both online and in stores, in the past few years.”
So why might this be? It seems that the environmental impact of fast fashion and the rise of resale could be having an effect.
“[It] could be due to tightening belts,” Hooker added. “But we’re also increasingly seeing sustainability creep up the agenda, meaning consumers may be emphasising buying fewer, higher priced, better quality goods, just less often. We have also seen growth in the popularity of alternative models such as rental, and resale of secondhand goods.”
Kien Tan, retail director at PwC, also said: "We know from previous surveys that spending less on clothing typically translates into buying fewer items rather than trading down to different shops, so this suggests a more challenging outlook for mid-market and fast fashion retailers in the coming months.”
Copyright © 2020 FashionNetwork.com All rights reserved.