Choose speciality channel:   Choose sector channel:     Search the site

How to Guide


Opinion: Days of cheap clothing are numbered

Opinion: Days of cheap clothing are numbered

By Neil Saunders, Verdict Consulting

Over the past five years, British consumers have enjoyed the benefits of rapid clothing deflation which has brought them, year on year, cheaper apparel products from skirts, to T-shirts.

However, according to analysis from Verdict Consulting, this trend is now coming to a close and while prices will remain relatively low over the next five years, shoppers should not expect to continue seeing the dramatic falls in price they have witnessed in the past. Indeed, in some categories apparel prices are likely to increase.

Verdict’s analysis shows that between 2003 and 2007 deflation has been a constant feature of the clothing market and, over this period, prices have fallen by an average of 10 per cent. Such reductions have been brought about by a number of factors.
The growth of value clothing players like Primark and the expansion of the grocery multiples into clothing has reshaped the competitive landscape and provided consumers with cheaper offerings than were traditionally available at many high street stores.
Traditional clothing specialists have sharpened their own prices in response, which has driven down prices still further.

All of this has been underpinned by the ability of retailers to cheaply source products from overseas.

Verdict is forecasting that by 2010 price inflation will have crept back into the clothing market, bringing td a 12 year period of continuous price deflation. Over the next five years apparel prices will increase by slightly less than 1 per cent.

 Year Inflation/deflation (%) Year Inflation/deflation (%)
 1990 4.2 2002 -3.5
 1991 2.9 2003 -2.5
 1992 0.0 2004 -3.5
 1993 0.9 2005 -3.3
 1994 1.4 2006 -2.2
 1995 0.6 2007 -1.7
 1996 -0.6 2008 -1.3
 1997 0.9 2009 -0.3
 1998 -0.6 2010 0.1
 1999 -2.4 2011 0.4
 2000 -4.0 2012 0.5
 2001 -4.1  

This table shows the long term rate of inflation/deflation for the clothing market from 1990 to 2012.  (Source: Verdict Consulting 2007, all rights reserved)

At a sector level, womenswear will bear the brunt of the inflation, with average prices increasing by 4.7 per cent over the period 2008-12. Menswear will still see some deflation, but price decreases will be significantly less over the next five years than they have been over the previous five.

Meanwhile, the smaller footwear and accessories sectors will continue to be subject to strong deflation as the grocers and value players establish more of a presence in these markets.

According to Verdict there are three main factors behind the reverse of the deflationary trend.

First, having already secured many of the financial benefits of international sourcing, it will be very difficult for retailers to extract significant extra savings from moving production to ever cheaper locations.

Over the past five years, reducing manufacturing and production costs has been instrumental in allowing retailers to cut prices without seriously damaging their margins.

Going forward, retailers will not have this ability and, therefore, will be much more constrained in terms of reducing their prices.

Moreover, a greater focus on ethical sourcing by consumers will mean retailers need to be far more careful in terms of their sourcing policies: something that could also constrain their ability to reduce production costs.

Second, the cost of doing business is increasing rapidly. Verdict estimates that in 2006 alone, collectively retailers faced an additional £9.5bn of additional costs from a variety of sources including rent increases, higher energy prices and increased staff costs.

This trend is likely to continue, and as it does it will make it progressively more difficult for clothing retailers to cut prices without harming their margins.

Third, UK consumers are saturated with clothing: the average woman, for example, buys twice as many clothing items per year today as she did back in 1995.

The effect of this is that reducing clothing prices is unlikely to stimulate demand and result in retailers selling more volume, as has been the case in the past.

As a consequence, many retailers have started to focus on adding value to their clothing ranges and encouraging consumers to trade up to more expensive products. This focus on more expensive products will push up average prices.

We’re starting to emerge from the low price, high volume business model which has characterised large segments of the clothing market for the past five or so years. Low prices are no longer the differentiator they once were.

The new model is much more about adding value and providing clothing that is aspirational or different. To an extent people are bored with clothing shopping: they do like low prices, but they also want to be inspired and they’re prepared to pay for the privilege.

The main implication of this repositioning and the price increases is that retailers will need to work much harder to convince consumers to buy.

Over the next five years, retailers are going to have to justify their prices a lot more and that means investing in things like product design, store environment and the whole customer service experience.

The days when clothing retailers could simply reduce their prices and expect to sell more as a result are drawing to a close.

It’s now much more challenging and generating increased market share will be dependent on successfully balancing price and many other aspects of the proposition.


cialis prescription coupon cialis coupons from lilly
cialis coupons from lilly link free printable cialis coupons
late abortion when is it too late to have an abortion
cialis free sample coupons pet prescription discount card
prescription coupon card new prescription coupons prescription savings card
cialis discounts coupons go pet prescription discount card
how much is the abortion pill abortion services
free prescription drug cards free prescription discount cards
late abortion aborted babies
viagra kamagra link viagra
naproxennatrium open naproxen nsaid
levodopa carbidopa entacapone bioequivalence carbidopa levodopa entacapone combination carbidopa levodopa entacapone combination
duphaston tablete za odgodu menstruacije duphaston tablete kako se piju duphaston
price of abortion pill what is abortion pill buy abortion pill
cialis discounts coupons coupons prescriptions
abortion pill online side effects of abortion pill low cost abortion pill
naltrexone abuse ldn for depression naltrexone how long does it take to work
low dose naltrexone contraindications naltrexone injection cost
will naltrexone show on a drug test naltrexone reviews alcoholism
difference between naltrexone and naloxone link naltrexone withdrawal
naloxone challenge test how long does it take for naltrexone to work buy naltrexone online
phenazopyridin erfarenhet phenazopyridin dosering

Check out 12ahead, our brand new platform covering the latest in cutting-edge digital marketing and creative technology from around the globe.

12ahead identifies emerging trends and helps you to understand how they can apply to modern-day companies.

We believe 12ahead can put you and your business 12 months ahead of the competition. Sign up for a free trial today.