The hike in inflation means the cost of everyday items such as food, fuel and clothing will go up for consumers across the UK.
And with the Bank of England forecasting inflation will continue to rise to 10% this year, the situation is likely to become even more strained in the coming months.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataSpeaking exclusively to Just Style, Pippa Stephens, apparel analyst at GlobalData, says: “With clothing and footwear prices continuing to rise, and the cost of living having also surged in recent months due to cost increases across necessities like energy and food, causing consumers’ discretionary income to be drastically reduced, many shoppers have been forced to cut back on purchases of non-essential apparel items.”
According to GlobalData’s monthly UK consumer survey conducted in April 2022, only 30.4% of UK consumers do not expect their clothing and footwear shopping habits to change as a result of price rises, whereas 32.1% stated that they will buy fewer items, and 13.1% will stop purchasing them altogether, emphasising the impact that increasing costs will have on the overall clothing and footwear market this year.
“Consumers aged 16-44 expect their shopping habits to alter the most because of these increasing inflation rates, likely due to younger consumers generally being on lower incomes, meaning they will be harder hit by higher living costs, while intentions also differ strongly by gender,” Stephens adds. “More females cited that they plan to change their shopping habits, since men generally have a greater focus on essentials, whereas women tend to make apparel purchases more often to keep up with trends, which they can cut back on more easily now that prices have increased.
“These shifting spending habits are partly to blame for the UK apparel market experiencing muted growth in 2022, and remaining notably below 2019 levels, and even then, only a small proportion of this growth is due to increased volumes, since inflation rates are so high.”
According to a report published by The Independent, charities have already reported increased sales of and demand for secondhand clothing in response to increased production costs driving high street fashion to its priciest levels since 1988 when records began.
The British Retail Consortium (BRC) explains higher energy prices along with a tight labour market, and the huge costs of moving goods around, are impacting all retailers.
A spokesperson for the BRC tells Just Style rising inflation and falling consumer confidence “is likely to hold back consumer spending on items like clothing.”
“Retailers through all sectors are seeing their costs rise – the fashion sector is no exception to that, seeing higher transport costs, increasing input costs of goods often imported from abroad.
“We are facing more difficult times ahead. Retail is a very resilient sector and we have confidence that clothing retailers will do what is necessary to ensure they can succeed. That might be by expanding affordable ranges of clothing or focusing on customer groups that are still spending on clothing. Obviously, the impact of inflation doesn’t fall equally on everyone, and it is likely the households that are struggling will be the ones that cut spending the most. “
Many clothing retailers have already confirmed they are likely to implement price increases across ranges as they look to pass on the cost.
Earlier this year, Next Plc warned of price increases as a result of higher cost of goods and increases in UK operating costs linked to wage inflation.
Meanwhile, Primark, which booked a surge in first-half sales, said while it has been able to broadly mitigate rising supply chain costs and inflation in raw materials during the first half due to a favourable dollar exchange rate and reduction in-store operating costs, the second half will see customers feel the effect of price increases on some of the autumn/winter stock due to inflationary pressure and the strengthening dollar.
“Brands will be looking at ways they can reduce costs,” the BRC spokesperson adds. “I’m sure some retailers will be absorbing some of the price rises themselves in order to protect their customers and that will no doubt help keep the demand up.
“It is a difficult time for the entire industry and with inflation set to top 10% later on this year, that situation is going to get harder. We will continue to see prices rise in all sectors of retail and we wait to see whether or not there will be action by governments and banks to help redress the situation.”
