Holiday demand set to drive summer retail spending

Summer holiday demand is expected to provide a boost for fashion retailers over the coming months, with new research showing many consumers plan to buy clothing and footwear ahead of their trips.

According to KPMG UK’s latest Consumer Pulse survey, 63% of UK consumers have either booked or intend to book a summer holiday this year. Among those travelling, 75% said they plan to purchase new items before travelling. Clothing is the most popular category, with 42% intending to buy new clothes, followed by footwear at 25%.

The findings suggest retailers could benefit from continued demand for seasonal fashion despite ongoing pressure on household budgets.

Linda Ellett, Head of Consumer, Retail & Leisure at KPMG UK, said: “Summer holiday demand is looking healthy, particularly given household essential cost levels, nervousness about the economy and consequences of the Iran conflict.

“Spending on holidays, and UK days out, continues to be prioritised from available budget, far more so than other big-ticket items. And there are welcome signs that holidaymakers plan to spend on new purchases to pack in their suitcases, which retailers will be competing hard for this summer.”

The survey comes as several major fashion retailers have reported encouraging demand for their spring/summer ranges.

Last week, Associated British Foods said Primark enjoyed a “strong start” to its spring/summer season in March before sales softened during April and May due to unseasonable weather and weaker consumer sentiment linked to conflict in the Middle East. Trading improved in June as weather conditions became more favourable.

Meanwhile, Inditex, owner of ZARA, said its spring/summer collections had been “very well received” by customers, with first-quarter sales increasing 5.8% to €8.7 billion. Store and online sales also increased by 11.5% between 1 May and 1 June.

KPMG’s research also found that holidays remain consumers’ biggest discretionary spending priority this summer, ahead of UK days out, eating out and entertaining at home.

However, broader consumer confidence remains subdued. While 55% of respondents said they feel secure in their personal finances, 60% believe the UK economy is worsening, with grocery and utility costs remaining the biggest concerns.