Inflation Effect
After years of apparel deflation, the retail industry can no longer combat rising production costs without affecting the consumer.
0Ever wonder why we have ubiquitous sample sales, great end of season markdowns and score designer copy cats for less at retailers like H&M and Forever 21? No it’s not only the recession but also the deflation. Since their peak in 1992, apparel costs have remained low. In 2009 for example, retail prices inched up just .6%.
Next year, will be a different story.
Retailers are wringing their hands with worry over how expense increases are going to affect consumers next year. The recession after effects are clear – cotton is up 50%, transportation costs have skyrocketed, and closed factories remain dark even as demand rises. Consumers still want apparel items quicker than ever meaning rising costs in production and air freight. The logistics and supply cannot keep up with the increasingly confident consumer, who will end up footing the bill.
For the past few years, sales have become glorified shopping opporutnites. With Bloomingdale’s Private Sales and websites like Gilt and RueLaLa, we have nearly forgotten what it means to pay full price. Looming inflation means less markdowns. Is it the end of sample sales as we know it? It might several months to feel the trickle down effect of higher labor, transportation and material costs as designers and retailers still have to purge through the past few season’s worth of apparel. Still most economists and retail analysts agree that apparel inflation is inevitable forcing the consumer will be forced to foot some of the bill.
Emma Dinzebach
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Posted by Emma Dinzebach at 12:00 AM
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