As non-essential stores were allowed to open, clothing spend began to recover as June unfolded. Sections of the public came back and spent. Anecdotal evidence was lower footfall, higher conversion and higher spend. But since early July, the recovery has stalled. A material number of people for a variety of reasons do not yet feel comfortable to travel and shop when they don’t need to.
August has turned down a little and demand softened. Clearly, this trading climate is like no other we have seen and discerning the current and likely future pattern of trade is very difficult. June is usually apparel’s biggest sales month after December. As mentioned before, the stalled recovery was the dominant trend into July but right now, demand is softening as August unfolds. The market looks markedly weaker month on month.
Many are relying on September. Most company budgets remain based on the trading patterns of years past: Summer holidays over, kids back to school and life and retailing returns to normal. September is usually the 3rd biggest spending month of the year, a whisker behind June. While I expect there to be an uptick in business, I think the increase will be muted and disappointing.
The outlook for the second half of the year, and Christmas, is grim. While there may be some gradual increase in confidence, depending on progress with vaccines and assuming no serious second wave, the recession will accelerate and dampen demand over the period. I expect second half clothing sales to run at -25% year-on-year over the period into, and including, Christmas. This will be an improvement on the first half but nowhere near enough for most to claw back business lost.
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