The long-predicted death of the high street has yet to occur – and it increasingly looks as though online fast-fashion retailers are the ones in the direst straits this year. Asos (ASC), for instance, reported a drop in sales over the crucial Christmas shopping season, citing falling incomes among its younger customer base.
The ongoing cost of living crisis is bound to hit discretionary consumer spending. But some offerings inspire more loyalty than others. JD Sports (JD.) said last month that annual pre-tax profits will come in at the top end of market expectations and that it anticipates profits crossing the £1bn threshold next year.
And whereas struggling companies cite under-pressure incomes, the likes of JD push back. The group’s boss, Régis Schultz, told the Financial Times that rising minimum wages and a tight employment market in many countries have meant that the younger demographic has actually seen an increase in its disposable income. Some of these consumers also live at home with their parents, meaning that they are more protected from utility price inflation. It may be that the young people who’ve stopped frequenting Asos’s virtual storefront are simply more interested in JD’s real ones.