2018 will be tough for UK fashion retailers, says GlobalData

2018 is set to be yet another difficult year for UK fashion retailers, according to data and analytics company GlobalData. Clothing and footwear volumes declined 0.8 percent have been linked to higher manufacturing and import costs, which reflect the weakness of the British pound following the UK’s vote to exit the European Union. In addition, inflation has increased 2,4 percent last year, forcing retailers to pass the increased costs onto consumers in the form of higher prices, thereby causing retail in the UK to hit its lowest point in five years, a KPMG/Ipsos Retail Think Tank (RTT) report.

“While inflation is forecast to soften this year, budgets will remain under pressure and shoppers will still be unable to afford further price hikes, minimising the opportunity for volume recovery”, said GlobalData in a statement. The data company predicts most consumers will “shop from their own wardrobes”, only buying items they can justify spending money on.

There is a silver lining, however: online clothing and footwear is forecast to grow 10.8 percent in 2018, second only to the health and beauty sector. “Maximising online opportunities to drive sales and customer acquisition is vital, with multichannel players needing to invest to keep up with pure online players such as Asos and Boohoo”, noted Mamequa Boafo, senior retail analyst at GlobalData.