Wednesday, June 19, 2024

UK fashion shoppers ditch supermarkets for trendier rivals

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Between 2021 and 2023, the UK’s ‘Big Four’ supermarkets’ share of the country’s apparel market fell 1.6ppts from 8.4% to 6.7%.

GlobalData said the rising cost of food caused UK consumers to cut back on non-essentials with many now “bypassing the clothing aisle” in supermarkets entirely.

GlobalData apparel analyst Alice Price said consumers are also becoming more discerning over fashion purchases, leading them away from supermarkets, which are generally seen as less fashionable options.

“These negative fashion perceptions especially harm their appeal among younger shoppers, who represent a particularly lucrative demographic amid the cost-of-living crisis, as their desire to keep updating their wardrobes means they are less likely to cut back on apparel. Grocers have also been impacted by consumers trading up to more expensive fashion brands, with many now prioritising higher quality products that offer greater value for money,” Price added.

UK supermarkets see apparel market shares continue to decline

Source: GlobalData. Note: Market shares represent GlobalData’s estimates for grocers’ apparel revenue for the calendar year, including sales tax.

Walmart-owned UK supermarket Asda performed strongest of the ‘Big Four’, with revenue from its George at Asda apparel brand rising 3.4% to 31 December 2023. For Q1 2024, Asda has already reported a 3% increase in sales compared to 2023.

Price attributed this to Asda’s clothing partnerships with reality stars and its online shop performing better than rival supermarkets.

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This is in direct contrast to Tesco, which closed its clothing and home website in 2021. The supermarket also ended its deal with UK fashion retail giant Next in 2023. As a result, revenue from its F&F clothing and home range fell 3.4% in the year to 24 February 2024.

Sainsbury’s has also seen its clothing sales fall 6.4% in the year 2 March 2024, despite launching third-party labels such as Simply Be and Little Mistress. Price said its likely the high price point of the third party brands failed to resonate with Sainsbury’s customers.

In February 2024, Sainsbury’s announced it would be cutting its store space dedicated to clothing to make way for more food items. Sainsbury’s also stated that its general merchandise and clothing inside its stores will become more aligned to customers’ grocery missions in future in a bid to ensure ranges are “more relevant and desirable”.

Morrisons, which attracts much lower revenue from its clothing ranges than rivals, has announced plans to discontinue the online store for its Nutmeg brand. Price suggested the company should focus on essential ranges and childrenswear and emphasise the value-for-money of the range in order to appeal to “cash-strapped shoppers” during the ongoing cost-of-living crisis.

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