May 25, 2018 | By Isabelle Coates
Experience the leading provider of consumer foresight.
Jun 15, 2017
Supermarket fashion came to the fore during the last recession, circa 2008, when uncertainty and job losses squeezed disposable incomes and forced shoppers to reconsider their shopping habits. Almost a decade later, economic uncertainty once again reigns supreme as Brexit looms, inflation rises, wages stall and shoppers tighten their purse strings. Given the current uncertainty, it is no surprise that the supermarket fashion sector is once again showing signs of innovation and expansion, hoping to capitalise on shoppers trading down.
Instock data shows that in the year-to-date (YTD) both F&F Tesco and George @Asda grew new-in volumes by 39.9% and 27.2% year-on-year (YOY), driven by menswear. Sainsbury’s Tu line took a more considered approach, reducing new-ins by 0.8% – although menswear grew 18.4%. Within womenswear, Sainsbury’s reduced new-ins by 10.4% but expanded its Tu Premium collection.
The retail landscape is vastly different in 2017 as compared to 2008, and low prices are no longer enough to drive spend. The supermarkets’ core target customer – the family shopper’s -shopping habits are more considered, value for money is a priority and buying less but buying better is a growing norm as evidenced by the success of lifestyle brands such as Joules, Boden and White Stuff.
The sector is also becoming increasingly competitive. In February, Morrisons expanded its Nutmeg brand to womenswear, while discounter Lidl has just announced the launch of its new clothing range with supermodel Heidi Klum. Furthermore, Amazon and Zalando have emerged as credible and convenient options for value-driven shopping for the whole family, further intensifying competition for the supermarket sector.
Instock data shows that not only have average prices gone up across all three supermarkets, but price architectures have also shifted slightly. Tesco and Sainsbury’s raised exit prices – Sainsbury’s with the introduction of its Tu Premium range and Tesco with the expansion of its branded product ranges (Simply Be, Jacamo etc).
Post-Brexit price rises are a concern for consumers and retailers alike, and are particularly pertinent to the price-sensitive value shopper base. To counter, supermarkets are attempting to imbue clothing ranges with more value via seasonal editorials, collaborations (Tu with Davina McCall, Sainsbury’s with Gok Wan) and a push on e-commerce. These moves are essential to help supermarkets become more competitive with online retailers such as Very, Amazon and Zalando.
On average, supermarkets have become more strategic with their discounting this year. Asda and Tesco have both reduced the percentage of product that they mark down (by 8.4pp and 15.9pp YOY respectively), despite increasing new-ins.
On the other hand, Sainsbury’s has increased markdown levels, but this is due to strategic discounting over Valentine’s and Easter rather than blanket discounting. On average, markdown levels and average discounts at the supermarkets are lower than the market average.
More encouragingly, new-ins with out-of-stocks (OOS) increased across the board – indicating consumer demand – a positive sign for the sector.
With disposable incomes restricted and mid-market retailers, such as the department stores struggling, supermarkets have a real opportunity to benefit from consumers trading down, but communicating price and quality will be vital.
Note: All data refers to the four-month period from January to April 2017 and is collected from Instock – WGSN’s retail data platform.
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