The top 10 cities in the UK share some of the highest fashion revenues in the country, but the shoppers they serve have some very different perspectives and spending habits.

London, and the wider South East, top the ranking as one of the most affluent areas of the UK. But, the question is whether this translates into higher fashion spend. Based on the results of this survey it is in fact shoppers in Birmingham and Newcastle that would appear to spend the most on fashion with average annual spend over the last 12 months of £313 and £304 respectively.

This is even more pronounced for Baby Boomers in Liverpool (average spend of £507) and Generation X respondents in Newcastle (£581). This highlights the importance of ‘disposable‘ income in determining fashion spend as both these groups are on the whole more affluent with lower outgoings than their younger counterparts.

While the younger Generation Z and Y consumers tend to shop the most frequently, with 13.0% and 11.9% respectively shopping for clothes more than once a week, for those cities where their disposable incomes are more constrained their spend would appear to be lower. For example, Generation Y shoppers in London have a relatively high average fashion spend of £357, yet this trails the £436 and £413 spend of their generational counterparts in Glasgow and Edinburgh.

London, while not topping the ranking in terms of fashion spend, will always remain attractive to fashion retailers due to the volume of international visitor spend that takes place in the city. However, beyond this it appears to be those markets where disposable incomes are perhaps under the least amount of pressure that could prove to be attractive expansion opportunities.

The outlook for fashion spend across the top 10 UK cities is relatively weak with the majority of respondents reporting that they are looking to reduce their fashion spend over the next 12 months. Brexit and associated negative newsflow regarding the strength of the UK economy is no doubt behind this.

^{Source: Savills Research, Verdict}

At 41%, London has the strongest positive outlook in terms of future fashion spend (sentiment score). Liverpool reported the weakest sentiment score with 22% of respondents stating that they were planning to increase their fashion spend over the coming 12 months.

Whether this weak ‘sentiment’ will translate into reduced spend however is another question. The dramatic decline in consumer sentiment reported by GfK immediately after the Brexit result did not correspond with the fact that retail spend actually increased in July.

Some of this uptick can be attributed to improving weather and extension of the ‘sale’ period. With no major change in people’s personal economic circumstances over the short term we could continue to see relatively robust fashion spend at a city level. There are certain demographic groups at a city level, however, that would appear to be more positive regarding their future spend than others.

The younger Generation Z and Y respondents across the top 10 cities were more positive regarding their future fashion spend than their older counterparts. The most positive being Generation Y shoppers from Birmingham with 85.1% stating that they were planning to increase their spend on fashion over the next 12 months. Further reassurance to those fashion brands with a presence in the city considering that this is also the group with the highest average annual spend on clothing and footwear.

However, there are varying levels of risk facing fashion spend across the major cities. These being ‘satisfaction’ with the local fashion offer and what this means in terms of online spend. Spending online accounts for a third of fashion spend across the 10 major UK cities with Birmingham and London leading with 40% and 39% done through online channels with Cardiff having the lowest proportional online spend of 25%. This level of online spend bears a loose correlation to satisfaction with the local retail offer, that is the percentage of respondents who stated they were satisfied to very satisfied with the centre’s fashion offer. For example, both London and Birmingham had the lowest satisfaction level of the top 10 cities, but the highest proportion of online spend. In contrast Cardiff, with the lowest proportional online spend, had the highest satisfaction level at 84%.

As already highlighted, a significant proportion of this online spend does touch a ‘store’ so the proportion of true pure play online spend across the UK’s top cities is perhaps lower than that indicated above. It does raise a question, is there is a gap between what is demanded and what is available?

On a national basis it is the younger demographic groups of Gen Y and Z that would appear to be the most satisfied with their local fashion offer, and this is mirrored in London, Manchester, Leeds and Liverpool. However, this is not the case for the remaining top 10 cities where satisfaction rates are, on the whole, highest for the Baby Boomer groups.

This potential mismatch is also apparent in the distribution of retailers between value, mass and aspirational brands present in each city and what brands survey respondents stated they purchased from most frequently (see Figure 10). In all cases survey respondents have opted to shop for a higher proportion of Value retailers than accounted for (available) in the city centre.

^{Source: Savills Research, Verdict}

The biggest mismatch would appear to be in Cardiff and Manchester. London’s West End would also appear to be relatively under supplied in terms of value fashion brands although we would highlight that this reflects the demands of domestic shoppers rather than those of international tourists who typically account for at least 50% of retail spend in the area.

Of course this apparent ‘under supply’ of value fashion reflects, to a certain extent, the convenience nature of this end of the market as naturally these are the brands consumers will tend to shop in most frequently. Having said this, the analysis would suggest there is scope for value fashion brands to further increase their presence across the 10 major UK cities. This is apparent in the brands respondents noted when asked what retailers they would like to see in the locations they shop the most, as Primark and Zara topped the bill.

While relatively better supplied, there may also be an opportunity for improved levels of provision of aspirational fashion brands. London is the best supplied, for the reasons already discussed. Birmingham, Liverpool, Newcastle, Edinburgh and Cardiff would appear to have more constrained levels of supply in terms of aspirational brands relative to consumer preferences. Birmingham is the most constrained. Availability of mass brands is, on the whole, better across the top 10 cities. Having said this, relative to survey responses, provision is perhaps more constrained in London, Leeds and Glasgow presenting a potential opportunity for brands in this space.