(last updated July 2019)
What has been happening in the clothes retailing sector
The clothing sector evolved as consumer interest in branded fashion labels has increased. This led to many retailers changing the nature of their businesses by specialising in a certain type of clothing (men's casual wear, for example).
The appearance of the retail outlet itself is now really important and retailers have generally brightened and modernised their shops to attract customers. Many of the clothing chains refurbish their premises at regular intervals to project a stylish and up-to-date image.
Many non-specialist retailers - particularly the major supermarkets - now sell clothes, intensifying competition for small independent clothes shops that target the lower end of the market.
The sector has also seen:
- an increase in imports from countries where clothes are cheaper to manufacture, although there has been a recent trend for some manufacturers to 'reshore' their operations back to the UK
- saturation of the market, with the volume of clothes for sale beginning to exceed consumer demand
- the launch of ecommerce websites by a number of online-only specialists, by most of the large shop-based clothing chains and by some independents as well
Clothes prices fell year on year between 2000 and 2009 before starting to recover from 2010 onwards. Although the economic downturn of the late 2000s and early 2010s forced many clothing retailers to discount heavily, average clothing prices actually increased during this period as retailers were forced to pass on to customers rises in manufacturing costs. The trend in rising prices continued during 2017, with prices rising strongly during the year. During the economic downturn, value retailers like Primark out-performed the rest of the sector as clothes buyers looked to get the most for their money where possible. They have continued to perform well despite the squeeze on high street spending due to the vote to leave the EU and the uncertainty arising from the Brexit negotiations.
The huge growth of the internet has seen a revolution in the way we buy many different things, including clothes. Many established High Street retailers have their own e-commerce websites, and clothes are also sold by other online retail specialists such as Asos. eBay operates a Fashion Outlet through which very many brands and retailers sell and of course, the site is also extensively used by private individuals to sell off unwanted items of clothing (new and used). The rise of ecommerce has made the clothing industry even more competitive, particularly as supermarket giants like Tesco also now sell clothes online. Most experts agree that although the internet presents an opportunity to retailers who embrace it, it's a real threat to the traditional High Street shop. It's forecast that the value of online clothing sales will continue to increase, particularly with the ongoing growth in popularity of m-commerce (shopping using mobile device like a smartphone or tablet).
Clothes shops have continued to perform badly, with many on the High Street struggling in 2016 and 2017. In the year to September 2016 sales declined year on year by 5.9%. The poor results are due to many factors, including:
- unseasonal weather - the hot September of 2016 left many racks of autumn and winter clothes unsold
- the recurrent problem of over-buying and deep discounting, leading to intense price competition and customers being reluctant to pay the full price
- the growing level of online sales, particularly among young shoppers who like the fresh fashions, quick delivery and cheap prices
- increasing inflation, lack of growth in wages and falling consumer confidence
- a switch in consumer spending from buying clothes to eating out and travel
Sales picked up in 2017, but only by a small amount. The KPMG/Ipsos Retail think tank predicted that during 2018 mid-market clothing stores would be hit particularly hard by squeezed consumer spending. The percentage of the total retail clothing market accounted for by online sales continued to rise, reaching nearly a quarter of all sales in 2017. This trend is forecast to carry on.
Costs increased in 2017 after the Brexit vote led to a fall in the value of the pound, increasing the cost of imported goods. Rising inflation reduced consumer spending power and restricted the ability of retailers to pass on the increased costs. Consumers have been looking for value for money and are expected to continue to do so. Although the value of the clothing industry is forecast to continue to grow, most of the growth is expected to be due to the weak pound driving up the cost of imports and manufacturing.
Keeping up to date with the clothing retailing sector
Joining a trade association is an excellent way of keeping up with developments in your industry. Trade associations that represent the clothing industry include:
- UK Fashion and Textile Association (UKFT)
- Association of Suppliers to the British Clothing Industry
Although these have a strong focus on the manufacturing end of the supply chain, they still have some relevance for retailers as well. Visit their websites for more information.
You can get a lot of vital information about upcoming fashions and the latest trends at fashion shows and trade fairs. You will be able to meet with suppliers and designers and plan your future stock buying. The Exhibitions UK website includes details of trade shows that may be of interest to you.