As the Christmas reporting season comes to a close, a return to in-store shopping in the post-pandemic world, freezing temperatures and the impact of the cost-of-living crisis delivered a range of results for fashion retailers over the period. 

What set apart winners and losers? And what do their figures foretell for 2023? Here are the key trends from the Christmas trading results in the category.

Going out, back in

The BRC-KPMG Retail Sales Monitor recorded an increase in sales of clothing and footwear on a like-for-like and total basis in December, which would have provided relief for many fashion retailers in tough trading conditions.

The Christmas period is typically a time of celebration, but the pandemic – including the omicron outbreak in late 2021 – hit sales of partywear and brought the rise of loungewear in its place over the last few years.

This festive season was a different story as in-person social events made a comeback. 

Sequin dress

Several retailers reported increased sales of occasion and partywear

Primark parent ABF finance director John Bason said: “By and large people wanted to be out to enjoy themselves. Christmas wasn’t just about presents, it was about going out.

“I’d have bitten their hand off if someone had said this is how trading would be for this period. Underlying it all, I think the consumer has been way more resilient than any of us would have dared hope.”

Marks & Spencer reported that sales of partywear doubled. Quiz also generated strong partywear sales, contributing to an 11% increase in total sales. 

“We are pleased with the strong consumer demand during the important Christmas trading period,” said chief executive Tarak Ramzan. “This reflected the Quiz brand’s outstanding reputation for delivering glamorous occasionwear at great value.”

Sosandar also reported an increase in sales of partywear and formal tailoring, and the retailer said “customers traded up into higher-priced items and categories.”

Freezing temperatures also prompted a surge in sales of clothing such as knitwear, as reported by fashion retailers including Next and Fat Face. 

Next reported a “dramatic boost” to sales during the cold period in December, and attributed pent-up demand “from an unusually warm October and November”, while Fat Face achieved record sales of knitwear and dresses.

In-store success

Amid concerns over the future of physical shops and the surge in online sales over recent years, shoppers opted to return to shops for their Christmas purchases.

Primark said its performance came on the back of “strong footfall compared with the previous year’s Omicron period” across city centre stores, high streets and retail parks, as sales climbed 18% to £3.15bn.

Reiss reported a similar trend as in-store sales rose to 18.5% over the Christmas trading period.

Omnichannel retailers did well. Next said sales at its stores division, as well as online, exceeded expectations and were “particularly strong”.

M&S also reaped the benefits of its omnichannel strategy. It recorded a 12.8% increase in store sales over the period, and click-and-collect orders increased 20%, demonstrating the increased use of such in-store services over the festive season.

A decline for pureplays

In comparison to the success of omnichannel retailers, trading at online specialists was hit by disruption as a result of postal strikes, which benefited retailers offering click-and-collect services.

Boohoo posted an 11% decline in revenue for the four months to December 31, 2022, and similarly, Asos reported a decline of 3% in revenue for the same period.

Primark does not sell online and Bason believes the channel is destined for lower growth. He maintained: “We’ve got to move on from that narrative that online just increases all the time. To me, online looks mature.

Fatface jpg

December’s cold weather led to a surge in knitwear sales

“Everybody’s tried it, everybody uses it, but you use it at times that suit you and when it suits your pocket. It’s more expensive to have stuff delivered to your home, not surprisingly.”

While Christmas was difficult for some pureplays, others already had pre-existing problems specific to themselves to overcome that may have hindered them over peak.

Asos, for instance, said it was “battling to adjust in a shifting market” in the run-up to Christmas. 

Retail Week senior retail analyst Kate Doherty said: “It is anticipated the fashion pureplays that have suffered this Christmas will be focusing on enhancing the speed and reliability of delivery services, boosting efficiencies in warehouses and distribution centres, optimising website user functionality, and assessing suppliers and brand partnerships to ensure sustainable inventory levels.”

Value vs volume 

As shoppers dealt with the cost-of-living crisis, worries about consumers spending more but buying less were on retailers’ minds. 

According to the Office for National Statistics, consumer prices rose 6.5% across clothing and footwear during December last year. However, that was down from 7.5% from the previous month. The BRC said “discounting ahead of Christmas helped to ease inflation in areas such as clothing and footwear”.

Fat Face said it achieved its “best-ever trading week” following the launch of its Boxing Day promotional Sales, as consumers continued to shop the clothing discounts.

Primark reported that an increase in like-for-like sales was a result of “higher unit volumes, higher average selling prices and a normalised level of markdown”. M&S said that it achieved an uplift in volumes as well as value.

Staying in style

Despite initial concerns that profit expectations might be reduced on the back of what many feared would be a weak festive season, this was not generally the case.

Next increased its earnings guidance after Christmas, while others such as M&S were confident that existing guidance would be met.

However, there could still be uncertainty ahead for fashion retailers. Many, despite doing well over Christmas, flagged caution about trading conditions. ABF said “macroeconomic headwinds remain and may weigh on consumer spending in the months ahead”.

However, Bason observed that “people are already buying their beachwear for the summer with us” and was optimistic that conditions would improve. He noted welcome factors such as falling freight rates and, while inflation in food – an essential category of spend – would remain sticky, he believed there would be “quite a sharp fall in the CPI” more broadly.

As retailers gear up for what is likely to be a challenging year, they start from a good position, however, Retail Week’s Doherty warned: “2023 will be a difficult balancing act between conservative spending and streamlining operations, alongside bold decision-making that will win consumers’ attention.”