The country’s retailers have been struggling in an increasingly competitive environment as a result of the growth of online-only rivals, unseasonal weather and a shift in consumer spending, reports The Telegraph.
Despite consumer confidence increasing, spending on clothing and footwear has been declining since the middle of 2014 and is being outpaced by consumers treating themselves to evenings out and holidays.
As a result Moody’s forecasts clothing sales at Marks & Spencer and Next will suffer from slower profits growth in the next year and a half.
“Whilst it is still early days and there is possibly some upside to the guidance, the environment has become less supportive for non-food textile retailers, which is likely to affect profit growth in 2016 to 2017,” said Ernesto Bisagno, senior analyst at Moody’s.
Next’s chief executive Lord Wolfson warned last month that the high street bellwether was facing its “toughest year” since the financial crisis.
Meanwhile, figures from the British Retail Consortium confirmed the dire state of the high street with clothing and footwear retail sales in March falling to the lowest level in two years, despite a number of mid-season promotions.
Overall retail sales were flat in March while they grew by 1.4pc over the last three months, according to figures by the BRC.
“Looking at the long-term picture, the rolling 12-month average growth slowed to 1.4pc, its lowest since August 2015,” said Helen Dickinson, chief executive of BRC.
“This slowdown can’t be viewed in isolation; retail is an industry undergoing significant structural change as the investment in the digital offer continues apace while, from a consumer perspective, more disposable income is being spent on leisure and entertainment.”
David McCorquodale, head of retail at KPMG, added: “Earlier Easters are not always good for the fashion industry as consumers are put off purchases of lighter fashions in cooler temperatures and this was certainly the case here.”
Separate figures from Barclaycard showed a 1.2pc slump in women’s clothing sales last month while garden centres were dampened by a 3.5pc sales drop as stormy weather made people reluctant to spend time outside.