Clothing Retailing

Clothing Retailing - UK

Executive Summary – UK – October 2011

The clothing sector was an above average performer in 2010 but 2011 has been much more challenging for fashion retailers and consumers alike.

Just over half of all adults now claim to be spending less than they used to on apparel. 超半数成人花费更少的钱购置服装。

Inflationary pressures will start to annualise by the end of this year and whilst we remain cautious about prospects for 2012, conditions could start to improve by the second half. 通货膨胀压力会持续到年底，但下半年情况可能会好转。

Hilary Monk, Senior European Retail Analyst

Outperforming in 2010

2010年，服装零售产业表现的很好，sales增加了5.4% （value和volume），而所有零售领域的销售量只增加2.6%（value）和1.5%（volume）。虽然vat从2010年初有所增长，但服装零售价在下降。

Young fashion drives growth

Only three other segments grew faster than the clothing sector in 2010 – footwear specialists, non-store retailing, and mixed goods retailers. Much of the sector’s growth continued to be driven by young fashion chains and the value retailer Primark. Besides, there was also evidence of older shoppers returning to the market during the second half of the year.

Market Factors:

Landscape changes in 2011

The clothing landscape has changed for retailers and consumers in 2011. Average selling prices have risen steadily as most retailers were unable to absorb a second VAT increase in two years plus significantly higher input prices (soaring cost of cotton plus upward pressure on wages and transportation costs). After more than a decade of deflation, this era has come to an end and consumers have responded by curtailing their spending. Sector sales growth slowed to 2.9% in the first half of the year and despite slightly easier second half comparatives it will be a challenge to maintain this level of growth.

Inflationary pressures will start to ease in 2012

However the outlook for clothing inflation is better as cotton prices are already

significantly lower than their peak in March 2011 and capacity constraints are easing in the Far East. By November 2011 certain inflationary pressures will begin to annualise and the current VAT increase annualises in January 2012 (据英国《卫报》2月14日报道：英国国家统计局数据显示，英国国内上月通胀率缩减为3.6%，这是连续14个月以来的最低水平，这说明英财长奥斯本提高增值税的措施初显成效). Both factors could help to stimulate better volume growth in 2012 and we may see some signs of the trading environment improving during the second half of the year.

Tough times are far from over

Nevertheless demand for clothing will clearly be influenced by wider economic factors too. Incomes continue to be squeezed although that may start to ease as other commodity price

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