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Premium brands experiencing sales growth despite cost-of-living crisis

Chloe Burney
03 April 2023

Premium brands are experiencing a growth in sales as shoppers look for quality over quantity, despite the continuing cost-of-living crisis.

Research conducted by CACI (Consumer and Location Intelligence) highlights the importance of in-person retail experiences as shoppers opt for in-store purchases over online.

Brand Dimensions, CACI’s new data platform, compared the spend across 300 well-known brands representative of the UK market. This data shows that 35% of premium retailers saw sales growth when comparing December 2021 with December 2022. Only 19% of premium brands saw any decline in sales.

Retailers including Reiss, Patagonia, and Sunglass Hut all improved on last December whilst experiencing an average transaction value (ATV) of over £100, highlighting a correlation between quality and quantity.

Rachael Bedford, Brand Dimensions Leas at CACI, commented: "Through Brand Dimensions, we have been able to identify a range of interesting retail trends, that could well define the industry in 2023. Despite initial assumptions around where consumers were likely to spend their money, and the expectation of choosing brands, plenty of consumers are valuing quality over price, highlighting a shift in behaviour and spend."

CACI’s data collection points to a change in spending motivations, with a greater emphasis on sustainability and ease of use. For example, despite growth at fast-fashion ecommerce Shein, it has been outperformed by Vinted, the second-hand online marketplace.

The data also identified growth in in-store shopping, with over 60% of sales in store seeing an overall increase in performance. Meanwhile, brands operating mostly online have struggled to match their 2021 performance, with 69% of online-dominant retailers experiencing a decline in sales.

Bedford concluded: "In terms of how people are choosing to spend their money, the in-store experience is clawing back territory lost to online, a shift accelerated by the pandemic. There are many factors to consider here, such as Royal Mail strikes reducing confidence in delivery times, particularly during the Christmas period. However, it does showcase the enduring power of physical retail, and only reinforces its importance and the need to keep evolving and improving the IRL experience."

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