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Fashion Network
2 days ago
- Business
- Fashion Network
May UK spending falters, consumers cut back on fashion say Barclays, BRC
The UK's consumer spending and retail spending reports are coming in for May and they don't look that impressive. On Tuesday, Barclays released its general consumer spending data for discretionary categories and the British Retail Consortium/ KPMG their retail sales numbers, with both showing anaemic growth year on year last month. First Barclays. It said consumer card spending was up just 1% in May compared to the same month a year earlier. It had seen 4.5% growth in April (partly boosted by sunny weather and Easter). But this time the weak growth didn't come anywhere near the latest CPIH inflation figure of 3.5%. That said, May's two Bank Holidays and record spring sunshine supported seasonal categories like pharmacy, health and beauty (+12%), and travel (+3.7%), yet this was offset by wet weather in the latter half of the month, amid consumers cutting back and a fall in consumer confidence. Confidence in household finances declined three percentage points to 67%, while the ability to spend on non-essentials dropped to 56%. In response, nearly half of consumers (46%) say they're cutting back on discretionary spending. And even more painful for fashion retail, clothing/accessories is the most common category being reined in. Card spending on clothing rose just 0.9% in May, although the volume of clothing purchases was up 3.8%. This suggests shoppers are still refreshing their wardrobes, but switching to cheaper items or brands, or perhaps that retailers are keeping a lid on prices and cutting them as well in an attempt to shift stock. Despite exercising financial caution, two in five UK adults say they still enjoy treating themselves regularly but are finding budget-friendly options. Popular choices include waiting for sales (41%), opting for smaller, affordable treats (36%, which could boost beauty), and setting aside savings specifically for occasional indulgences (24%). As for the BRC/KPMG report, despite focusing on retail spending specifically rather than general consumer spending, it showed similar patterns to Barclays. In the four weeks from 4 May to 31 May, UK total retail sales increased by 1% year on year and non-food sales actually decreased by 1.1%. In-store non-food sales fell 0.9% and online they were down 1.5%. The online penetration rate (the proportion of non-food items bought online) was flat at 35.9% in May. Helen Dickinson, CEO of the British Retail Consortium, said: 'Consumers put the brakes on spending, with the slowest growth in 2025 so far. This was due largely to declines in non-food sales, as fashion and full price big-ticket items were held back by lower consumer confidence.' And Linda Ellett, UK Head of Consumer, Retail & Leisure, KPMG, added: 'While the sunshine continued, the pace of retail sales growth didn't in May. Early seasonal purchases were likely a factor, as was a dampening of some spending appetite as households reflected upon the recent combination of essential bill rises. Travel demand for the summer months ahead looks healthy, so retailers will be hoping June sees an upturn in related spending as people begin to think about what they want to pack in their suitcase.'
Fashion Network
2 days ago
- Business
- Fashion Network
May UK spending falters, consumers cut back on fashion say Barclays, BRC
The UK's consumer spending and retail spending reports are coming in for May and they don't look that impressive. On Tuesday, Barclays released its general consumer spending data for discretionary categories and the British Retail Consortium/ KPMG their retail sales numbers, with both showing anaemic growth year on year last month. First Barclays. It said consumer card spending was up just 1% in May compared to the same month a year earlier. It had seen 4.5% growth in April (partly boosted by sunny weather and Easter). But this time the weak growth didn't come anywhere near the latest CPIH inflation figure of 3.5%. That said, May's two Bank Holidays and record spring sunshine supported seasonal categories like pharmacy, health and beauty (+12%), and travel (+3.7%), yet this was offset by wet weather in the latter half of the month, amid consumers cutting back and a fall in consumer confidence. Confidence in household finances declined three percentage points to 67%, while the ability to spend on non-essentials dropped to 56%. In response, nearly half of consumers (46%) say they're cutting back on discretionary spending. And even more painful for fashion retail, clothing/accessories is the most common category being reined in. Card spending on clothing rose just 0.9% in May, although the volume of clothing purchases was up 3.8%. This suggests shoppers are still refreshing their wardrobes, but switching to cheaper items or brands, or perhaps that retailers are keeping a lid on prices and cutting them as well in an attempt to shift stock. Despite exercising financial caution, two in five UK adults say they still enjoy treating themselves regularly but are finding budget-friendly options. Popular choices include waiting for sales (41%), opting for smaller, affordable treats (36%, which could boost beauty), and setting aside savings specifically for occasional indulgences (24%). As for the BRC/KPMG report, despite focusing on retail spending specifically rather than general consumer spending, it showed similar patterns to Barclays. In the four weeks from 4 May to 31 May, UK total retail sales increased by 1% year on year and non-food sales actually decreased by 1.1%. In-store non-food sales fell 0.9% and online they were down 1.5%. The online penetration rate (the proportion of non-food items bought online) was flat at 35.9% in May. Helen Dickinson, CEO of the British Retail Consortium, said: 'Consumers put the brakes on spending, with the slowest growth in 2025 so far. This was due largely to declines in non-food sales, as fashion and full price big-ticket items were held back by lower consumer confidence.' And Linda Ellett, UK Head of Consumer, Retail & Leisure, KPMG, added: 'While the sunshine continued, the pace of retail sales growth didn't in May. Early seasonal purchases were likely a factor, as was a dampening of some spending appetite as households reflected upon the recent combination of essential bill rises. Travel demand for the summer months ahead looks healthy, so retailers will be hoping June sees an upturn in related spending as people begin to think about what they want to pack in their suitcase.'
Spectator
21-05-2025
- Business
- Spectator
Rachel Reeves is to blame for the 3.5% inflation spike
There is no positive spin to be put on this morning's inflation figures, which show the Consumer Prices Index (CPI) rising from 2.6 per cent to 3.5 per cent in a single month. If you want to do the trick of stripping out energy and food prices to arrive at so-called 'core' inflation (how you can have a cost of living index which excludes two of the biggest costs faced by households defeats me) the picture is even worse – core inflation is even higher, at 4.5 per cent. If you want to use the government's preferred measure, CPIH, which includes an element of housing costs, then that too is higher than CPI, at 4.1 percent. Housing costs, energy costs, food, transport – all are going up – with just a small drop in prices of clothing and footwear, and furniture.
Fashion United
13-05-2025
- Business
- Fashion United
Consumer card spending increases 4.5 percent in April
The warm weather in the UK and the late Easter weekend boosted essential and non-essential spending in April, according to Barclays' monthly Consumer Spend report. Barclays reports that consumer card spending grew 4.5 percent year-on-year last month, the biggest uplift since June 2023, and above the latest CPIH inflation rate of 3.4 percent, for the first time in over two years. Non-essential spending reached a 21-month high, increasing by 5,1 percent, while essential spending returned to growth after two months of decline, at 3.1 percent. Retail spending rose by 6.8 percent year-on-year, with Barclays adding that every retail subcategory reported growth for the first time since tracking of these categories began in 2019. This included clothing spending up 3.6 percent, while transaction growth hit 6.2 percent. Pharmacy, health and beauty also saw spending growth of 15.1 percent. Barclays also adds that research conducted in late April showed that seven in 10 UK consumers (72 percent) were concerned about the impact tariffs could have on their household finances, although this was an improving picture compared to the start of the month (77 percent). Over a quarter (27 percent) reported trying to save more money each month to build up a buffer, in case prices rise in the future. UK shoppers are also prioritising British-made products, with seven in 10 (68 percent) looking to support UK businesses, while one in eight are willing to pay a premium for British or local products and brands, with this group also adding that they are happy to pay 22 percent more on average. Karen Johnson, head of retail at Barclays, said in a statement: 'April's sunny weather inspired consumers to embrace the best of Britain, with all retail, hospitality, and leisure subcategories in growth for the first time in over five years. 'While the long-term impact of any tariffs on household finances remains to be seen, given Thursday's announcement of a UK/US trade deal, shoppers are demonstrating a commitment to supporting British business, while still carefully managing their money.
Edinburgh Reporter
02-05-2025
- Business
- Edinburgh Reporter
With Inflation Rising and Markets Wobbling — Where Are Smart Investors Turning Now?
In March 2025, the UK Consumer Prices Index (CPI) rose by 3.4%. Rising costs are putting a strain on household budgets and hurting investor confidence. Stock markets are unstable, savings are shrinking, and many conventional investment strategies are ineffective. In this uncertain environment, it's clear that being cautious is not enough. So, where are smart investors looking to put their money now? And what can you learn from their new strategies? As per reports from the Office for National Statistics (ONS), the Consumer Prices Index, including housing costs (CPIH), also increased 3.4% in March 2025. With the value of the pound dropping, smart investors are re-evaluating their alternatives for growth and protection. Here's how they are changing their approach. Photo by Maxim Hopman on Unsplash Inflation Forces a Rethink on Traditional Investments UK inflation hit 3.7% in Q3 2025, mainly due to rising global energy prices and high food costs. This inflation reduces people's purchasing power, making low-yield savings and fixed-rate accounts less appealing. Traditional vehicles no longer offer real benefits. As a result, investors are looking for assets that can keep up with inflation instead of just protecting their capital. Investors Shift Gears Amid Market Volatility Thanks to its global connections, the FTSE 100 has largely stayed steady. In contrast, the FTSE 250, which focuses more on the UK market, has faced significant challenges. In response, many investors are changing their portfolios. There is a clear trend toward buying dividend-paying stocks and investing in safer sectors like healthcare and utilities. These areas are seeing increased investment. This shift shows a growing desire for investments that provide income and lower risk. 'A move toward safety is happening,' said a financial strategist in London. 'In a time when market swings are common, the need for stable income is critical.' Diversification Is No Longer Optional Investors are becoming careful about managing risks. They are diversifying their portfolios with a mix of multi-asset funds and global ETFs that cover different regions and asset types. A recent report from Investment Week shows that UK fund managers feel cautiously optimistic in early 2025 as they deal with geopolitical uncertainty and changing consumer behaviour. More investors are interested in Environmental, Social, and Governance (ESG) portfolios in this environment. These investments match what investors care about and provide a way to grow and stay strong in sectors focused on sustainability. As people look to make a positive impact with their money, ESG portfolios are becoming a wise long-term choice rather than just a passing trend. REITs Offer Property Access Without the Hassle Real Estate Investment Trusts (REITs) are becoming popular with investors who want to invest in property without owning it directly. They are appealing because they offer liquidity and help diversify investment portfolios. Take Edinburgh, for example. Its commercial property market is doing well due to high rental demand and a strong local economy, and many investors are taking notice. One expert states, 'You no longer need to be a landlord to enjoy the benefits of real estate. Without those annoying midnight phone calls, REITs give you the flexibility you want.' This makes investing smarter for everyone! Physical Assets Become a Hedge Against Uncertainty When markets become unstable, physical assets offer stability. Classic cars and rare art pieces are popular investment options. Recently, whisky cask investment has gained recognition as a smart option for those wanting to protect their money from inflation. This trend attracts collectors and new investors looking to explore this unique market. One option quietly gaining interest is whisky cask investment – long considered a niche collector's pursuit, but now entering the mainstream as a slow-growth, tangible alternative. According to a spokesperson from 'Whiskly casks are a good investment in times of high inflation and uncertainty. Whisky casks in particular are appealing to investors who want something physical, historically stable, and entirely separate from the stock market.' These assets are not only visually attractive, but they can also offer significant returns over time. Bonds Make a Comeback Despite Rate Cuts UK bond funds are gaining popularity, attracting £13.7 billion in net inflows, making them the top performers this year among all fund types. Many older investors are returning to NS&I products and Premium Bonds due to their stability and government backing. Recent interest rate cuts have led some to look for higher returns, but bonds still offer a safe option for cautious investors. These financial tools remain a trusted alternative for secure investing in uncertain times. Young Investors Are Prioritising Purpose Over Hype Interest in cryptocurrency is decreasing, and a new trend is increasing among younger investors, especially Millennials and Gen Z. These individuals focus on crowdfunded projects and community-driven businesses. Instead of looking for high investment returns, they invest in companies that match their values, such as ethical startups and local sustainability initiatives. For this generation, it is essential to actively shape the future they want to see and create positive change instead of only watching the market. Final Thoughts – What's Next for Investors in 2025? The old rules of investing are becoming outdated. As inflation changes the economy, savvy investors are changing their strategies for success. The future is not just about getting by; it's about being flexible, finding real value, and creating diverse portfolios. From sustainable funds to whisky casks and dividend-paying stocks, the best strategies combine strength with good returns. As we look toward 2025, remember that getting through tough times is insufficient. You need to change, adjust, and succeed. Don't wait for stability to come back. Change your portfolio now with a strategy focusing on being strong and earning good returns over the long term. Like this: Like Related
