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This was stated by the sector’s largest companies, including Sweden’s H&M and Britain’s Next and Co-op, in comments to Reuters.
H&M CEO Daniel Erver noted that the ongoing conflict and high energy prices will intensify inflationary pressure on consumers, who are already facing rising prices.
According to him, disruptions in global supply chains and oil prices rising above $100 per barrel are already increasing transportation costs and disrupting trade flows.
Prices in the fashion retail sector will rise by up to 10%
British retailer Next announced that it may raise prices as early as June, factoring in about £15 million in additional costs for fuel, logistics, and supplies. The company estimates that the potential price increase will be about 1–2%, but could rise to 5–10% if the conflict drags on.
However, Next CEO Simon Wolfson noted that consumer activity remains steady for now, and there has been no noticeable drop in sales in the UK.
Polish fashion retailer LPP also stated that rising fuel and logistics costs could affect the company’s results this year.
Demand in the EU has fallen to 2023 levels
Against the backdrop of rising costs, consumer sentiment is also deteriorating. According to industry surveys, retail sales in the UK posted their sharpest decline since April 2020, and the consumer confidence index fell to its lowest level in recent months.
In Germany, consumer expectations are deteriorating due to the risk of rising energy prices, while in Italy, consumer confidence in March fell to its lowest level since late 2023.
Co-op notes that consumer confidence remains “fragile,” and shoppers continue to be cautious about spending due to pressure on household budgets.
