The slowdown in UK retail-sales growth to 4.2% in January (albeit against a strong 2022) suggests share-price euphoria after better-than-expected peak trading may have been misplaced, with volume falling more severely, even with heavy discounting, finds Bloomberg Intelligence.
More concerning is the 3.6% online dip against an easy comparable plunge of 24% in 2022, reflecting online retailers’ Asos, Boohoo and THG’s unabated market-share losses to physical peers (with double-digit sales gains in clothing and beauty). ABF’s Primark and B&M – providing affordability – could fare better.
Tatiana Lisitsina, BI industry analyst (retail), comments: “The 2022 theme of the fashion stores’ revival may continue in 2023 as online continues to nosedive (11.5% in 2022 in the UK) from beauty (THG) to apparel (Asos, Boohoo),with profit protection prioritized over sales growth.”
UK fashion stores steal Christmas cheer from online rivals
December’s 6.1% decline in UK retail volume – after the Black Friday period is adjusted for – stands in contrast with the 3.3% gain in value as consumers spent more and got less. Online beauty (THG) and fashion (Asos, Boohoo) plunged, though non-food stores (JD Sports, Next) proved more resilient, with non-seasonally adjusted volume up 1.3%, supporting ABF Primark, which reports next week. The e-commerce underperformance was exacerbated by Royal Mail strikes, bringing the online share toits lowest point (25.4%) since the beginning of the pandemic (19.8% in February 2020).
