Insight Flash: CE data shows a marked deceleration in y/y spend growth for most major UK industries in July, with the softening in apparel spend particularly pronounced.
Does the recent moderation in UK price pressures herald an inflection in inflation? UK apparel spend is reflecting pressure the UK consumer has been under in recent months, feeling the pinch from the squeeze in real incomes. As inflation continues to rear its ugly head, grocery spend continues to grow strongly, up +8% y/y in July, the eleventh consecutive month of growth. However, this represented a sharp deceleration from June’s +18% spike.
UK Apparel Subindustry Growth YoY
Outside of grocery, UK debit and credit card data from Consumer Edge showed a marked deceleration in spend growth for most major industries in July. The notable exception was Full-Service Restaurants, where spend growth accelerated to +14% y/y versus +8% in June, although that growth comes against a soft prior-year comp of +1%.
UK Growth in Spend by Subindustry YoY
Elsewhere, spend growth in Apparel, Accessories and Footwear decelerated sharply in July to +1%, despite a soft prior year comp of -2%. The sub-industries that saw the weakest growth in July were Family Apparel (-0.7%), Fast Fashion (-2.1%) and Men’s Apparel (-7.2%). Women’s Apparel remained in positive territory (+0.2%) but decelerated sharply from June (+5.3%). Appetite for apparel spend appears to have been dampened by the unseasonally wet weather, as consumers opted against restocking their summer wardrobes.
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