Shop Talk: Slowing spend on apparel
Shop Talk is 22seven Insights’ monthly newsletter highlighting spending trends from our Grocery, Apparel and General Merchandise dashboards. We alternate commentary between the dashboards – this month, we’re focusing on clothing and footwear spending.
Highlights from the Apparel Dashboard
Spending on clothing slows before the higher fuel price bites22seven users aggregate spending on clothing slowed in May after a six-month trend of improving growth. This series has a strong historical relationship with StatsSA’s Clothing and Footwear retail sales and suggests official data for April and May could be disappointing.This slowing trend precedes the significant headwind to consumer spending expected from higher fuel prices that take effect from June. We quantified the effect of higher fuel prices in a recent research note and highlighted the risk to discretionary categories of spending, such as home furnishings and home renovations, that benefited disproportionately over the past two years.
Winners and LosersOur data shows that MRP has lost the most share of spending over the past year. This is shown in the chart below that reflects both Apparel and Home divisions and excludes any contributions from recent acquisitions.
Digging deeper into this performance, we estimate that the Home division accounts for most of this loss in share over the past year, although spending at the apparel division has slowed in the past two months.
Online clothing spending surges ahead in 2022User spending at online-only clothing retailers – Superbalist, Shein and Zando – has increased c50% in 2022 compared to the same period in 2021. Most of this increase in spending can be attributed to Shein and Insights will unpack the underlying trends and describe the characteristics of the early adopters driving this change in a research note later in June.The chart below also shows that users spending at online retailers’ typically increases throughout the year, with November a very significant contributor to the year and slower periods during typical holiday months – December, June, March/April- when delivery is more difficult, and users have more opportunity to visit a store.
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