UK and US retail sales: Consumers window-shop but don’t buy

1950s shopping

Two countries, two groups of consumers, two sets of figures. One similar result. Whether it’s Brexit blues or election uncertainty, it seems consumers in the UK and US just aren’t in a spending mood at the moment. At least they’re not in the mood to buy certain things. 

First the UK. The British Retail Consortium and Springboard said today that July footfall to stores fell 0.4% year-on-year. OK, it was better than June’s Brexit-induced 2.8% decline but in clearance sale month with discounts being extended for longer than usual, any kind of dip is bad news.

Oh, and store vacancies hit 10.1%, up from 9.6% three months earlier.

Back with footfall, the high street was actually up 0.3%, reflecting a trend of people making more evening visits to convenience stores. But mall footfall dropped 2% and retail parks 0.3%, which means they’re not even window shopping as much as usual.

Springboard noted that some big cities, especially London benefitted from the falling pound as tourists bagged bargains.

But overall it’s not a pretty picture, especially as positive figures that we’ve seen from various surveys recently point to any spending rise being focused on days out rather than buying physical goods. And rising online spending still isn’t quite taking up the slack either.

So what about the US? Well official data showed that retail sales were flat in July when autos were stripped out of the mix, with consumers still cutting back on discretionary spending. That hit the fashion sector and department stores particularly hard.

Clothing and accessory store sales fell 0.5% compared to June and 1.2% compared to July 2015. Department store sales were marginally higher than June but down a worrying 4% year-on-year.

Again, as with the UK, online sales are growing but the 1.3% rise was hardly enough to make up for falls elsewhere.

Analysts said the figures show Americans spending less on goods like clothes and electronics and more on entertainment, travel and healthcare. Healthcare accounts for about 20% of total US consumption, up from 5% in 1960 and is expected to account for 25% within a decade.

The uS is seeing a similar spending trend to the UK. Well, the healthcare trend isn’t, of course, but the days/nights out are. Shoppers are swapping experiences for stuff, which is great news for restaurants and theme parks but maybe not so much for fashion stores.

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