It has been a topsy-turvy year for British retailers as they get to grips with the more destructive elements of Brexit and the ever-growing e-commerce industry. The general prognosis has been bleak—consumer confidence has dropped, inflation has fallen as predicted, but so has wage growth, meaning there has been no easing of pressure on shoppers. And the impact has been stark: the first half of 2018 saw 4,400 store closures across the U.K. high street—more than in the whole of 2017.
However, before we drown our sorrows in a vat of mulled wine, there are a few developments to celebrate. The luxury sector is performing well, as is e-commerce, and the U.K.’s creative sector continues to be a world leader. And while the world is witnessing a major restructuring of the high street, it’s not bidding it farewell.
Here are a few trends we’ve seen in this rollercoaster of a year.
Fast fashion carries the Brexit burden
Last week’s poor Q4 Primark results show what we have long suspected—the uncertainty around Brexit is having a major impact on fast fashion. Primark, one of the high street’s best performers since the financial crisis, has warned of “challenging” sales in the run-up to Christmas. And they are not alone—nearly every fast fashion brand is struggling, as consumers lose confidence, which has led to declining footfall on the high street in every month of 2018.
“We don’t want to blame Brexit for too much,” said retail commentator Richard Hyman. “But the inescapable truth is that it is definitely having an impact. Retail remains highly volume sensitive. A shift in the behavior of even just 5 percent of shoppers will have a massive impact in trading economics and ignoring this in the mix is delusional.”
Luxury—thanks to high volumes of international customers in London who are unaffected by Brexit—continues to weather the storm.
Black Friday sales knock Christmas off kilter
Could Black Friday be the proverbial Grinch that stole Christmas? Retail footfall in November fell by 3.2 percent, a significant drop from the previous year which saw a growth of 0.2 percent. This drop is most likely down to the ‘Black Friday effect,’ where an increasing number of shoppers buy online rather than in-store during the discount sales period—and shop ahead for Christmas.
“Having made a huge song and dance about your amazing offers for Black Friday, how on earth do you persuade consumers of your great value after the event, probably back at full price?” asked Hyman.
“Christmas 2018 will come very late and fail to deliver the respite many in the industry need,” he continued. “Most retailers will enter Q1 2019 with less fat than needed to see them through the weakest trading period of the year. This will inevitably trigger stressful conversations with critical stakeholders. It’s going to be a bumpy ride.”
The e-commerce giant grows even taller
Online now accounts for almost 20 percent of retail sales, growing at 10 times the rate of store sales in 2018—and online retailers such as Asos are posting far higher Q4 returns than their brick and mortar equivalents.
Asos’s 18.4 million active customers helped retail sales grow by 26 percent, while Boohoo saw sales soar by 228 percent and profit increase by 40 percent. Meanwhile, Missguided, which sponsored the latest series of Love Island on ITV in the summer, saw sales of its clothes go up by 40 percent on the night the reality television show—which gripped the nation—aired. Unlike similarly priced brick and mortar stores, they currently seem less affected by Brexit.
Sustainability gets government backing
This was the year MPs got tough on sustainability. MP Mary Creagh, the chair of the Environmental Audit Committee, wrote directly to 10 of the country’s top chief executives, including Marks & Spencer, Next, Asda, TK Maxx, HomeSense, Arcadia, Tesco, JD Sports, Debenhams and Sports Direct. The retailers were questioned on their manufacturing ethics, recycling, plastic pollution and sustainability practices.
“The way we design, produce and discard our clothes has a huge impact on our planet,” Creagh said. “Fashion and footwear retailers have a responsibility to minimize their environmental footprint and make sure the workers in their supply chains are paid a living wage. We want to hear what they are doing to make their industry more sustainable.”
The government has threatened to fine any companies that don’t meet targets, and seems customers agree, with 60 percent of under-40s in the U.K. saying they would prefer to buy clothes from brands with ethical credentials.
Fur loses its cachet
In January, the British Fashion Council established the British high-end manufacturers database, an open-source directory that helps designers get ethical supply-chain certificates and stamp out animal cruelty. Asos updated its animal welfare policy in June to ban the use of feathers, silk, cashmere and mohair, in addition to fur, which it had already prohibited. Then in September, London became the first of the main fashion weeks to ditch animal fur in its shows.
Fur farming has been banned in Britain since 2000 but figures show the U.K. imported nearly 75 million pounds ($94.6 million) of fur in 2017. But if the country gets a Labour government next year then we could see the end of imports too, as Labour’s shadow chancellor John McDonnell told Newsbeat that”we should not have a fur trade that relies upon the suffering of animals abroad.”