UK Retail Trends – Spring Market Report 2023
£ 3,695 (Excl.Tax)
Description
“A combination of the cost of living crisis and natural rebalancing in key categories following heighted demand during the peak of the pandemic, saw volume retail sales decline by a record level in 2022. However, given the macro-economic backdrop retail demand held up relatively well and the sector enjoyed a better than expected festive period. Early 2023 has seen the trend of deep volume decline continue, and the prolonged squeeze on income will continue to create a tough trading environment in the short-term even if the signs are that inflation will begin to ease past Q1 2023.”
– Nick Carroll, Category Director – Retail Insights
Key issues covered in this Report:
- Market environment, consumer sentiment and the impact of the cost of living crisis
- Analysis of UK Retail Sales Performance – Quarter 1 2023
- Changes in Grocery and Non-food shopping behaviour
- Retail Launch Activity and Innovation – Quarter 1
- Special Focus – The future of fashion as seen by a Gen Zer
Table of Contents
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Key Findings
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- Consumers’ financial wellbeing has fallen from the highs of 2021
- Figure 1: Household financial wellbeing index, 2016-23
- Value growth slows in 2022, masking a record volume decline
- After a brief December respite, deeper volume declines return in 2023
- Figure 2: All retail sales (excluding fuel), non-seasonally adjusted year-on-year performance by value and volume, 2022-23
- Rebalancing in the online channel continues
- Figure 3: All online sales, value non-seasonally adjusted, year-on-year performance, 2021-23
- Cutting back and rebalancing sends grocery sales into negative volumes
- Figure 4: All grocery retail sales (excluding fuel), non-seasonally adjusted year-on-year performance by value and volume, 2022-23
- Fashion the standout non-food performer as post-pandemic recovery hits its stride
- Figure 5: Mintel Fashion Tracker: personal fashion purchases in the past three months, 2017-22
- Key launches and innovations in Q1
- George at Asda launches clothing collection for young people with disabilities
- Figure 6: George at Asda Easy on adapted clothing range, 2023
- Sephora opened its first retail store in the UK on March 10th
- Figure 7: Sephora Westfield, 2023
- Running specialist On opens first UK flagship
- Figure 8: On Running, Regent Street 2023
- Frasers Group launches its buy-now, pay-later app, Frasers Plus
- Arena Online launches the first AI-powered florist in the UK
- Figure 9: Arena Online, AI advisor Daisy, 2023
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Market Environment and Consumer Sentiment
- Inflation remains the key concern for consumers and brands
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- Figure 10: Inflation, overall index (CPI) and core categories, 2022-23
- Inflation continues to outpace wages turning the screw on finances
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- Figure 11: Real wages growth: Wages growth vs inflation, 2016-23
- Consumers’ financial wellbeing has fallen from the highs of 2021
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- Figure 12: Household financial wellbeing index, 2016-23
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- Figure 13: Future financial confidence index, 2016-23
- Inflation remains the key concern for consumers and brands
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UK Retail Sales
- Value growth slows in 2022, masking a record volume decline
- After a brief December respite, deeper volume declines return in 2023
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- Figure 14: All retail sales (excluding fuel), non-seasonally adjusted year-on-year performance by value and volume, 2022-23
- Store-based retailers are outperforming online-only rivals
- Figure 15: All retail sales (excluding fuel), non-seasonally adjusted year-on-year performance by value and volume, by core category, 2022-23
- Value growth slows in 2022, masking a record volume decline
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The Interplay Between Online and Stores
- Rebalancing in the online channel continues
- Figure 16: All online sales, value non-seasonally adjusted, year-on-year performance, 2021-23
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- Figure 17: Total online sales as a percentage of total retail sales (ex. fuel), 2021-23
- Store-based players outperforming…
- Figure 18: Share of online sales, by type of retail operation, 2018-2023
- …with stores reclaiming a majority of non-food sales
- Figure 19: Estimated share of total non-food sales, store versus online and other non-store, 2020-23
- Rebalancing in the online channel continues
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Grocery Shopping Behaviour
- Cutting back and rebalancing sends grocery sales into negative volumes
- Figure 20: All grocery retail sales (excluding fuel), non-seasonally adjusted year-on-year performance by value and volume, 2022-23
- Frequency of shop ticks back-up as consumer movement picks up
- Figure 21: Household Grocery shopping habits, 2017-2022
- Discounters gain as cost of living crisis bites
- Figure 22: Format where the most is spent, 2017-22
- Key financial updates from food and drink retailers in Q1
- Aldi reports record Christmas sales as the rising cost of living impacts shoppers
- Morrisons profits reports a 15% drop in full-year profits
- Tesco keeps profit guidance unchanged
- Mark and Spencer reports strong results during the Christmas period
- Ocado posts a loss of £500 million as retail sales dip
- Lidl Christmas sales grew nearly 25%
- Cutting back and rebalancing sends grocery sales into negative volumes
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Non-food Shopping Behaviour
- Following weak Q1 comparatives non-food stores settle into volume decline
- Figure 23: All non-food store-based retail sales (excluding fuel), non-seasonally adjusted year-on-year performance by value and volume, 2022-23
- Fashion the standout non-food performer as post-pandemic recovery hits its stride
- Figure 24: All store-based fashion retail sales (excluding fuel), non-seasonally adjusted year-on-year performance by value and volume, 2022-23
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- Figure 25: Mintel Fashion Tracker: personal fashion purchases in the past three months, 2017-22
- Home retail hit by brought forward demand and big-ticket caution
- Figure 26: All store-based household goods retail sales (excluding fuel), non-seasonally adjusted year-on-year performance by value and volume, 2022-23
- Health and beauty: A mixed but resilient performance
- Figure 27: All store-based health and beauty retail sales (excluding fuel), non-seasonally adjusted year-on-year performance by value and volume, 2022-23
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- Figure 28: BPC Tracker: shopping behaviour, 2017-22
- Key financial updates from non-food retailers in Q1
- Crew Clothing reports total store sales up 15%
- Primark sales over the period is expected to reach £4.2 billion
- Mark and Spencer reports strong results during the Christmas period
- Dr Martens reports 9% rise in its total revenue
- Following weak Q1 comparatives non-food stores settle into volume decline
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Launch Activity and Innovation for Q1 2023
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- George at Asda launches clothing collection for young people with disabilities
- Figure 29: George at Asda Easy on adapted clothing range, 2023
- UK: Jigsaw launches its Repair Rewear service
- Harrods launches beauty recycling scheme at H Beauty
- Figure 30: H Beauty MYBeauty Recycle, 2023
- Currys to trial sales of refurbished devices on its website
- Sephora opens first UK store in 17 years
- Figure 31: Sephora Westfield, 2023
- Frasers Group launches its buy-now, pay-later app, Frasers Plus
- Very extends Everyday range
- Figure 32: Very Everyday Range, 2023
- Running specialist On to open first UK flagship
- Figure 33: On Running, Regent Street 2023
- Under Armour reveals plans to open 3 stores across the UK
- Amazon Fresh stores to feature manned checkouts
- Arena Online launches the first AI-powered florist in the UK
- Figure 34: Arena Online, AI advisor Daisy, 2023
- Clarks and Zara team up for footwear collaboration
- Figure 35: Clarks x Zara collaboration, 2023
- River Island plans to expand its take-back scheme
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Special Focus: The Future of Fashion as seen by a Gen Zer
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- Why Gen Zs are key for the future of fashion
- Sustainability: My dilemma by a Gen Z
- Three 2022 findings which back up this scenario
- How this will influence the future of fashion in 2030
- A slower fashion model emerges
- Figure 36: Uniqlo Repair Studio, Regent Street, 2022
- Rising rental market
- Figure 37: Gigi’s Dressing Room, 2022
- Tracing the makers
- Figure 38: Martine Jarlgaard, production tracing, 2022
- Inclusivity and diversity: My dilemma by a Gen Z
- Three 2022 findings which back up this scenario
- How this will influence the future of fashion in 2030
- Immersive individualized ads
- Tech will make brands accountable
- Hyper-personalised fashion
- Figure 39: Paynter, small batch jacket, 2022
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