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Rise and fall in inflation has direct correlation with fall in fashion sales, report finds

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The fluctuations seen across the world’s fashion markets between 2021’s high and the relative low of 2022 can be directly related to the global economy and geopolitics, according to the RetailX Global Fashion 2024 report.

The Russian invasion of Ukraine in early 2022 had a dramatic impact on energy prices and the global supply and movement of goods. The rising price of energy – especially for transportation – saw a massive spike in inflationary pressure across the globe.

Costs of raw materials, manufacture, shipping – both within the supply chain and to stores – eroded margins for makers and sellers of fashion. The impact was an immediate rise in prices of all goods and services, not just those in the fashion sector, and a consequent wavering in consumer spending confidence. This impact has been felt across all of retail, with fashion experiencing a drop in sales in all regions during this period.

As shown on the inflation graph, it is clear to see that the rise and fall in inflation has a direct correlation with the fall in sales in each region. Africa saw the highest rise in inflation and consequently experienced the largest drop in fashion sales. 

Conversely, Asia saw a milder inflationary event, tempering the impact on levels of fashion sales.

With the latest data showing that inflation is falling rapidly in all regions bar Africa, it is encouraging to see that fashion sales have responded accordingly. 

However, with global economic prospects still seeing caution around Russia’s war against Ukraine, the Gaza situation and an unprecedented number of elections around the world, it is hard to predict where fashion sales will head in 2024.

Global shipping, still hampered by high energy prices and the movement of goods from Asia to the West via the Suez Canal subject to attacks off the Arabian peninsula, are all acting as a drag on more rapid inflation reduction in many markets. This is likely to continue to impact fashion sales worldwide, slowing growth at least across 2024 and possibly beyond.

There is still growth and, as economies improve, spending on discretionary items such as fashion is set to increase, as witnessed by ConsumerX shopper data

This is an excerpt from the RetailX Global Fashion 2024 report. In the full report we examine the reasons for this growth by region with Asia dominating global sales, outstripping its nearest rivals in the Americas and Europe two-to-one.

We look at the consumer, who are the buyers of fashion around the world and what drives their shopping behaviours?

As well as the devices used by fashion shoppers, examining the move to online and mobile but also in-store and the growth of subscriptions.

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