Sales begin in a climate of uncertainty

With inflation and rising clothing prices, consumers are paying more attention to what they are buying. Jeantrekkeur –

Merchants fear that consumers will judge their purchases against clothing.

Consumer behavior has rarely been difficult to predict. Will they be there for sales starting Wednesday? Traders are still in doubt. Inflation, which cuts into household budgets and encourages them to judge their spending, upsets all their expectations.

There are two types of hypothesesanalyzes Emmanuel Le Roche, general representative of Procos, which includes 310 brands. Some consumers may want to buy what they want or need at a competitive price, expecting higher prices tomorrow. This is the most favorable scenario for sales. On the contrary, another party may no longer have the financial resources to spend unrestricted expenditures, even at low rates.»

air hole in june

Higher fuel, food, and rent prices are increasing constrained household spending. The quota for other purchase items, especially clothing, is reduced. Moreover, inflation is not without the textile sector. Last May, clothing and footwear prices rose 4% in one year, according to INSEE.

In this context, consumers pay more attention to the labels of what they buy. “In March, the price rose among customers’ selection criteria in textilesnotes Helen Janikode, director of Kantar. Until this spring, they preferred rest. Price matters now too. “

The players gaining market share are the sports brands (decathlon again became the second apparel brand in France after Intersport) and those positioned at the entry level. Primark, which has just started selling online and in a very limited fashion (click and collect for kids), is experiencing strong growth and is regaining its level of presence before the health crisis. Action has distinguished itself as a Top 5 entry (in purchase volumes) in the Underwear, Hosiery & Home Furnishings segment. However, even the budget allocated to these low-cost players is decreasing, while the use of second-hand is increasing. Vinted has become the #1 online fashion retailer by volume. “Buying clothes online is getting poorer tooHelen Jannicode says.

Retailers are stuck between this customer demand, which they can’t ignore, and their own rising costs. “They want to sell their shares at reasonable prices but they must also maintain their marginsconfirms Johann Pettiu, delegate general of the Trade Alliance, which collects large brands of clothing. Transportation costs are still very high, over $10,000 per container. They are also affected by the increase in raw materials and the increase in rents. In addition, they must start paying off their state-guaranteed (PGE) loan.. “Due to the health crisis, distributors have often reduced the quantities required of their suppliers to avoid being overwhelmed with stocks. The shortage has reinforced this phenomenon.”In some brands, sales will likely continue lower this year‘,” Johann Pettiu predicts.

But to determine the level of discounts, clothing brands navigate in the fog. The evolution of sales since January is nothing but a luminous element. The first quarter was very bad (-14.2% compared to 2019). Teleworking in high doses and then the war in Ukraine did not help. Textile sales jump in May, up 11.5% over two years: unheard of.The weather was very nice and it has been two years since we opened this time, Johan Pettiot analyzes it. Maybe the French were dressed. But in June, he again took a cold shower (-7% compared to 2019 on June 19, according to Retail Int.). Did customers avoid stores in anticipation of sales? Brands hope so.