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Published
Nov 6, 2017
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Fashion faces tough UK Christmas, but beauty will boom

Published
Nov 6, 2017

We’ve seen a few surveys in recent weeks showing that UK Christmas spending is likely to rise this year but the latest set of data suggests that it’s inflation that will be driving that rise, not consumer enthusiasm, and the fashion sector will suffer as a result.


Department stores could suffer this Christmas as shopper buy beauty online - Archiv



A  predicted 1.9% sales rise (by value) for Q4 may look better than the 1.5% of the same period a year ago, but cross-category volumes are expected to be flat, while this time last year they rose 1.3%.

That’s no surprise given that inflation has been running at close to 3% in recent months. So will any sector outperform this Holiday season? Health & beauty should help to drive growth with a new report from GlobalData showing that innovation in the beauty market, coupled with the enduring health & wellness trend, means it will be the best performing category, forecast to grow 3.4% in Q4.

By contrast, overall non-food sales, which take in a variety of categories from fashion to homewares and electricals, as well as health & beauty, should rise only 1.2% which, with inflation taken into account, means a step backwards. Volumes are predicted to fall 0.1% due to higher prices surpassing demand.

The researcher said that weak sales in early Q4 may entice more retailers to take part in Black Friday this year, although this runs the risk of bringing forward discounted sales that might have otherwise been made at full price. GlobalData thinks could most certainly be the case for the most ‘challenged’ categories such as fashion and homewares.

Recent reports from chains such as John Lewis and Next have shown lower sales for fashion in the past month and with M&S and New Look reporting this week (and expected to also have bad news) the temptation to discount fashion early must be strong.


Christmas is expected to be tough for fashion retailers



GlobalData said that Q4 clothing and footwear volumes are expected to be down 0.6% even with plenty of new product launches and markdowns. 

But it said that retailers that have traded well so far this year such as Primark, Asos, JD Sports, Zara, Very, Kurt Geiger and Selfridges will continue to prosper. It seems their "compelling and differentiated propositions” are winning over customers even though the sector as a whole is weak. 

BEAUTY BOOST

And as for that prediction that beauty will do well, the company said that fragrance and make-up new releases such as Chanel Gabrielle perfume and Fenty and Victoria Beckham x Estée Lauder cosmetics ranges will fuel gifting spend. Meanwhile innovation-led skincare items which tap into the ‘clean’ trend and wellness revolution will be key too.

While that might usually boost department stores, they’re facing increased competition this year from Asos’s ramped-up beauty offer, as well as Boohoo and online beauty pureplays, “which are incredibly fierce on price and fulfilment.”

And strength among such pureplays underlines the fact that the e-channel is expected to be where a lot of consumers spend their Christmas budgets.

GlobalData expects companies such as Asos and Amazon to be seasonal winners across various categories, helped by flexible, fast and affordable delivery options.

Yet while more traditional retailers such as Next and New Look are also hot on delivery options, the researchers said that this could encourage shoppers to leave their purchasing until later in the season as they’ll be less worried about not getting their goods in time tor Christmas.

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