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Fashion: Impact of The Recession - UK - June 2010

The clothing sector has survived the recession, with the market growing 1.4% in 2009 to £41.3 billion and by an estimated 1.5% in 2010 to £41.9 billion. While growth was limited due to weakened consumer spending, sales remained in positive territory. Mintel looks at what consumers’ attitudes to spending on clothes have been during this period and what the future holds.

  • The clothing sector has survived the recession, with the market growing 1.4% in 2009 to £41.3 billion. Sales remained in positive territory, although growth was limited due to weakened consumer spending.
  • Value retailers outperformed the market, with sales from these outlets growing by almost 6% in 2009 to reach £8.1 billion. This growth has been driven by consumers’ continued value consciousness and pressure on disposable income.
  • Far from stopping spending on clothes last year, most people did not change their shopping habits. And although many tightened their purse strings, they did not stop buying clothes altogether.
  • Young people’s love of fashion and carefree attitude to the recession continued to drive sales, with one in five 16-24-year-olds spending more on clothes last year than they.
  • People like a bargain: almost half of consumers mostly buy clothes on sale or special offer. But retailers need to draw the focus away from discounting as price promotions rarely build loyalty and simply erode margins.
  • Some pent-up demand will be released this year as nearly 20% of consumers plan to spend more on clothes in 2010, almost twice the proportion who spent more in 2009.

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Table of contents

  1. Issues in the Market

      • Main themes
        • Definitions
          • Abbreviations
          • Future Opportunities

            • Changing shopping habits
              • Make it exclusive – and aspirational
                • Timeless style
                • Market in Brief

                  • Clothing market grows steadily
                    • Value and young retailers ride out recession in style
                      • Some retailers lose out, but fewer than expected
                        • Over half of consumers did not cut back
                          • Four in ten spent less, but still bought clothes
                            • Free-spending youth drive sales
                              • Some pent-up demand
                                • An era of thrifty spending
                                  • Discount-hungry consumers seek out bargains
                                    • Quality rules
                                      • Customer loyalty increases
                                        • M&S remains first choice
                                          • Value retailers and supermarkets compete
                                            • Future opportunities and challenges
                                            • Market Background

                                              • Key points
                                                • Economic summary
                                                  • Figure 1: Consumer confidence, 2007-10
                                                  • Figure 2: UK savings ratio, 1991-2009
                                                  • Figure 3: Consumer spending growth, selected sectors, 2009
                                                • Retail sales
                                                  • Figure 4: UK retail sales value growth, three-month moving average, 2007-10
                                                • Rising unemployment to depress retail demand
                                                  • Employment expected to recover
                                                    • Figure 5: Unemployment levels, seasonally adjusted, 2004-09
                                                    • Figure 6: UK unemployment rates, by age band (seasonally adjusted), November 2009-January 2010
                                                  • Youth fashion to be hit by declining population
                                                    • Figure 7: Trends in the age structure of the UK population, 2005-15
                                                  • Ageing population on the rise
                                                    • Fashionable 25-34s growing
                                                      • Middle-aged ready to indulge
                                                        • Figure 8: Trends in the UK adult population, by lifestage, 2005-15
                                                      • The affluent will drive population growth
                                                        • Figure 9: Trends in the UK adult population, by socio-economic group, 2005-15
                                                      • Recession reaches its end, but caution dominates
                                                        • Figure 10: GDP quarterly percentage change, 2004-09
                                                        • Figure 11: Trends in key economic indicators, 2005-15
                                                      • Where next?
                                                        • Incomes being squeezed
                                                          • Figure 12: Inflation vs. wages growth, 2008-10
                                                        • Getting connected
                                                          • Figure 13: Internet penetration at home/work/place of study or elsewhere in GB, by gender, socio-economic group and age, 2004-10
                                                      • Competitive Context

                                                        • Key points
                                                          • Consumer confidence levels
                                                            • Figure 14: Trends in the impact of the economic downturn on consumers, Jan 2009-April 2010
                                                          • Recession has been manageable
                                                            • Two in five hard hit
                                                              • Unaffected
                                                                • Worst impacted
                                                                  • Figure 15: Trends in consumer sentiment for the coming year, Jan 2009-April 2010
                                                                • Caution prevails
                                                                  • Confidence grows
                                                                    • The worriers
                                                                      • Expenditure priorities for 2010
                                                                        • Figure 16: Trends in what extra money is spent on and how people’s priorities have changed between November 2009 and April 2010
                                                                      • Days out replace short holidays
                                                                        • Eating and going out main priorities
                                                                          • Clothing spend holds up
                                                                            • Young people spend selectively
                                                                              • Figure 17: Trends in what extra money is spent on, April 2010
                                                                          • Market Size and Forecast

                                                                            • Key points
                                                                              • Figure 18: UK spend on clothing and footwear, at current prices, 2005-15
                                                                            • Clothing market grows steadily
                                                                              • Value clothing sales
                                                                                • Forecast
                                                                                  • Factors incorporated in the forecast
                                                                                  • Brand Communication and Promotion

                                                                                    • Key points
                                                                                      • Figure 19: Main monitored media advertising expenditure by major clothing retailers, 2006-09
                                                                                  • Winners and Losers in the Recession

                                                                                    • Key points
                                                                                      • Winners
                                                                                        • Figure 20: Selected clothing retailers’ Christmas trading results, 2009
                                                                                      • Strong trading over Christmas
                                                                                        • Value and young retailers outperform
                                                                                          • Young aspirational brands defy the downturn
                                                                                            • Young trendy lifestyle brands grow
                                                                                              • Midmarket suffers
                                                                                                • John Lewis renews focus on fashion
                                                                                                  • Online market sees split
                                                                                                    • Losers
                                                                                                      • Figure 21: Major companies entering administration, by annual sales, 2008-10
                                                                                                    • Mosaic Fashions emerges from administration as Aurora Fashions
                                                                                                      • Ethel Austin fails for the second time
                                                                                                        • Use of pre-pack administrations
                                                                                                          • The demise of the shoe shop
                                                                                                            • Emerging multiples and ones to watch
                                                                                                              • Gearing up for further growth
                                                                                                                • Coming over from abroad
                                                                                                                  • Moving overseas
                                                                                                                    • Key deals
                                                                                                                    • Who’s Innovating?

                                                                                                                      • Key points
                                                                                                                        • An evolving online market
                                                                                                                          • Topshop moves into premium market
                                                                                                                            • Diversification
                                                                                                                              • A new type of retail space
                                                                                                                                • Savvy supermarkets
                                                                                                                                • The Consumer – Clothes Shopping in the Recession

                                                                                                                                  • Key points
                                                                                                                                    • Over half of consumers did not cut back in 2009
                                                                                                                                        • Figure 22: Attitudes towards shopping now compared to last year, February 2010
                                                                                                                                      • Even in a recession, life goes on
                                                                                                                                        • Four in ten spent less, but still kept buying clothes
                                                                                                                                          • Free-spending youths drive sales
                                                                                                                                              • Figure 23: Attitudes towards shopping now compared to last year, by age group, February 2010
                                                                                                                                            • How shopping patterns vary by shopper type
                                                                                                                                              • Figure 24: Attitudes towards shopping now compared to last year, by shopper type, February 2010
                                                                                                                                            • Trading down
                                                                                                                                              • Designerwear buyers keep spending
                                                                                                                                              • The Consumer – Spending Intentions, 2010

                                                                                                                                                • Key points
                                                                                                                                                    • Figure 25: Spending intentions for the year ahead, February 2010
                                                                                                                                                  • Some pent-up demand
                                                                                                                                                      • Figure 26: Spending intentions in the year ahead, by shopper type, February 2010
                                                                                                                                                    • An era of thrifty spending
                                                                                                                                                      • Optimism prevails among the young
                                                                                                                                                      • The Consumer – What People Think About Buying Clothes in Recession

                                                                                                                                                        • Key points
                                                                                                                                                            • Figure 27: Attitudes towards buying clothes, February 2010
                                                                                                                                                          • Discount-hungry consumers seek out bargains
                                                                                                                                                            • One in three switch to value retailers
                                                                                                                                                              • Buying clever
                                                                                                                                                                • Quality rules
                                                                                                                                                                    • Figure 28: Attitudes towards buying clothes, by shopping patterns in 2009, February 2010
                                                                                                                                                                    • Figure 29: Attitudes towards buying clothes, by spending intentions in the year ahead, February 2010
                                                                                                                                                                  • More attitudes towards clothes buying in recession
                                                                                                                                                                    • Figure 30: Further attitudes towards buying clothes, February 2010
                                                                                                                                                                  • Replacement to remain top of the agenda
                                                                                                                                                                    • A move away from fast fashion
                                                                                                                                                                      • Impulse-buying loses its shine
                                                                                                                                                                        • Gift buying
                                                                                                                                                                            • Figure 31: Attitudes towards buying clothes, by spending patterns in 2009, February 2010
                                                                                                                                                                            • Figure 32: Attitudes towards buying clothes, by spending intentions in the year ahead, February 2010
                                                                                                                                                                        • How People Feel About Buying Clothes

                                                                                                                                                                          • Key points
                                                                                                                                                                            • Figure 33: Attitudes towards shopping for clothes, February 2010
                                                                                                                                                                          • Customer loyalty increases
                                                                                                                                                                            • Enticing reluctant shoppers
                                                                                                                                                                              • Making stores less intimidating
                                                                                                                                                                                • Figure 34: Attitudes towards shopping for clothes, by spending patterns in 2009, February 2010
                                                                                                                                                                                • Figure 35: Attitudes towards shopping for clothes, by spending intentions in the year ahead, February 2010
                                                                                                                                                                              • Further attitudes towards buying clothes
                                                                                                                                                                                • Figure 36: Further attitudes towards shopping for clothes, February 2010
                                                                                                                                                                              • Comfort takes priority over fashion
                                                                                                                                                                                • Flight back to quality
                                                                                                                                                                                  • Ethical fashion takes a back seat
                                                                                                                                                                                    • Figure 37: Further attitudes towards shopping for clothes, by spending patterns in 2009, February 2010
                                                                                                                                                                                    • Figure 38: Further attitudes towards shopping for clothes, by spending intentions in the year ahead, February 2010
                                                                                                                                                                                • The Consumer – Motivation to Buy Clothes in a Recession

                                                                                                                                                                                  • Key points
                                                                                                                                                                                      • Figure 39: Motivations to buy clothes, February 2010
                                                                                                                                                                                    • Sales drive clothes purchases
                                                                                                                                                                                      • Buying clothes as a treat
                                                                                                                                                                                        • Special occasions push people to purchase
                                                                                                                                                                                          • Making a good impression
                                                                                                                                                                                            • Figure 40: Motivations to buy clothes, by shopping patterns in 2009, February 2010
                                                                                                                                                                                            • Figure 41: Motivations to buy clothes, by spending intentions in the year ahead, February 2010
                                                                                                                                                                                        • The Consumer – Where Clothes Are Bought in Recession

                                                                                                                                                                                          • Key points
                                                                                                                                                                                              • Figure 42: Type of outlet used to buy clothes in the last 12 months, February 2010
                                                                                                                                                                                            • M&S remains first choice outlet
                                                                                                                                                                                              • Value retailers and supermarkets compete
                                                                                                                                                                                                • Midmarket to benefit from rise in 25-34s
                                                                                                                                                                                                  • Next wins online
                                                                                                                                                                                                    • Department stores perform well
                                                                                                                                                                                                      • Figure 43: Type of outlet used to buy clothes in the last 12 months, by shopping patterns in 2009, February 2010
                                                                                                                                                                                                      • Figure 44: Type of outlet used to buy clothes in the last 12 months, by spending intentions in the year ahead, February 2010
                                                                                                                                                                                                  • Appendix – The Consumer – Clothes Shopping in the Recession

                                                                                                                                                                                                      • Figure 45: Attitudes towards shopping now compared to last year, by demographics, February 2010
                                                                                                                                                                                                  • Appendix – The Consumer – Spending Intentions, 2010

                                                                                                                                                                                                      • Figure 46: Attitudes towards buying clothes in the year ahead, by demographics, February 2010
                                                                                                                                                                                                  • Appendix – The Consumer – What People Think about Buying Clothes in Recession

                                                                                                                                                                                                      • Figure 47: Most popular statements on buying clothes, by demographics, February 2010
                                                                                                                                                                                                      • Figure 48: Most popular attitudes towards buying clothes, by demographics, February 2010
                                                                                                                                                                                                      • Figure 49: Most popular statements on buying clothes, by demographics, February 2010
                                                                                                                                                                                                      • Figure 50: Most popular attitudes towards buying clothes, by demographics, February 2010
                                                                                                                                                                                                  • Appendix – The Consumer – How People Feel about Buying Clothes

                                                                                                                                                                                                      • Figure 51: Most popular statements on shopping clothes, by demographics, February 2010
                                                                                                                                                                                                      • Figure 52: Most popular statements on shopping clothes, by demographics, February 2010
                                                                                                                                                                                                  • Appendix – The Consumer – Motivation to Buy Clothes in a Recession

                                                                                                                                                                                                      • Figure 53: Most popular motivations to buy clothes, by demographics, February 2010
                                                                                                                                                                                                      • Figure 54: Most popular motivations to buy clothes, by demographics, February 2010

                                                                                                                                                                                                  Companies Covered

                                                                                                                                                                                                  • Adams Childrenswear Ltd
                                                                                                                                                                                                  • Adidas
                                                                                                                                                                                                  • Alexon Group
                                                                                                                                                                                                  • Asda Group Ltd
                                                                                                                                                                                                  • Banana Republic
                                                                                                                                                                                                  • BMB Clothing
                                                                                                                                                                                                  • British Sky Broadcasting Group plc (BSkyB)
                                                                                                                                                                                                  • Burberry Group Plc
                                                                                                                                                                                                  • Co-operative Group
                                                                                                                                                                                                  • Cotton Traders Ltd
                                                                                                                                                                                                  • Debenhams Total (GTV)
                                                                                                                                                                                                  • Dolce & Gabbana
                                                                                                                                                                                                  • Dorothy Perkins old
                                                                                                                                                                                                  • Giorgio Armani S.p.A.
                                                                                                                                                                                                  • Government Actuary's Department (GAD)
                                                                                                                                                                                                  • H&M Hennes & Mauritz
                                                                                                                                                                                                  • House of Fraser Plc
                                                                                                                                                                                                  • Hugo Boss
                                                                                                                                                                                                  • J. Sainsbury
                                                                                                                                                                                                  • Jacques Vert Group Ltd
                                                                                                                                                                                                  • JD Sports Fashion plc
                                                                                                                                                                                                  • JJB Sports Plc
                                                                                                                                                                                                  • John Lewis Plc (department store)
                                                                                                                                                                                                  • Kantar Media
                                                                                                                                                                                                  • Karen Millen
                                                                                                                                                                                                  • Lidl (UK)
                                                                                                                                                                                                  • Marks & Spencer
                                                                                                                                                                                                  • Matalan Ltd
                                                                                                                                                                                                  • National Schoolwear Centres Ltd
                                                                                                                                                                                                  • Nationwide Building Society
                                                                                                                                                                                                  • Nike
                                                                                                                                                                                                  • Northern Rock plc
                                                                                                                                                                                                  • Peacocks
                                                                                                                                                                                                  • Primark Stores Ltd
                                                                                                                                                                                                  • Ralph Lauren Ltd
                                                                                                                                                                                                  • River Island Clothing Co Ltd
                                                                                                                                                                                                  • Shop Direct Home Shopping Ltd
                                                                                                                                                                                                  • T-Mobile (UK) Ltd
                                                                                                                                                                                                  • Ted Baker
                                                                                                                                                                                                  • Tesco Plc
                                                                                                                                                                                                  • The TJX Companies
                                                                                                                                                                                                  • Topshop old
                                                                                                                                                                                                  • Virgin Media Ltd
                                                                                                                                                                                                  • Virgin Mobile
                                                                                                                                                                                                  • Vodafone Group Plc (UK)
                                                                                                                                                                                                  • Waitrose

                                                                                                                                                                                                  Fashion: Impact of The Recession - UK - June 2010

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