Over the five years through 2021-22, IBISWorld expects industry revenue to decrease at a compound annual rate of 4.1%. Growth rates have been constrained by challenging operating conditions, particularly from external competition from online only retailers such as Net-a-Porter, Asos and Boohoo, which has only been exacerbated by the pandemic. In addition to changing consumer trends, strong external competition, rising overheads and intense downward pricing pressures have weighed on revenue performance. Industry operators have also contended with supply chain pressures and modern slavery allegations.
Over 2020-21, industry revenue plummeted due to travel restrictions, store closures and social distancing measures following the outbreak of the COVID-19 (coronavirus) pandemic. In addition to the pandemic, operators also continued to navigate a complex with the end of the UK-EU transition period and logistical obstacles. Nonetheless, the outlook for the current year remains somewhat brighter. Over 2021-22, revenue is expected to rise 34.3% to £36.5 billion driven by revenge spending and the reopening of hospitality.
Over the five years through 2026-27, the Clothing Retailing industry's revenue is forecast to increase at a compound annual rate of 3.3% to reach £43 billion. The industry is expected to continue to face numerous challenges including excessive inventory wastage, the end of rent protection mechanisms in March 2022 as well as a hastened shift online. Competition from department stores, supermarkets and online retailers is also expected to remain strong. However, this is anticipated to encourage industry operators to adapt their operating models to give online portals a more central role in their business and to redouble marketing efforts to connect with customers. One of the most pertinent concerns facing the industry are calls for more stringent regulation over products and supply chains. At the same time, ethical consumerism and sustainable clothing represent a significant opportunity for growth.
Industry overview provided by IBISWorld.
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