According to the most recent Consumer Price Index (CPI) report, prices rose 8.3% in April compared to the year prior, remaining near the 40-year highs seen in March.1 Elevated levels of inflation have been driven by supply chain disruptions and pent-up consumer demand for goods following the reopening of the economy in 2021.
For global apparel brands, raising prices has become an integral part of the business model. Unfortunately, most brands won’t have a choice when it comes to raising prices this year. The cost of many raw materials has soared during the pandemic, including the cost of cotton, which hit record highs last year. Shipping costs are also sky-high, and a lack of warehouse space is driving up inventory expenses. As a result, apparel and footwear prices for the month of April rose 5.4% from a year ago, just slightly trailing the 6.2% jump seen in the Labor Department’s reading of “core” inflation, or prices on all goods outside of the volatile food and energy sectors.1
Our apparel report aims to identify trends and provide insights across the apparel sector, focusing on key themes, issues and opportunities. We address two key topics that have direct implications for the apparel and retail sectors: inflation and supply chain disruption. We hope you continue to find this report and its future editions to be a useful source of information.
1 Consumer Price Index. Bureau of Labor Statistics. May 11, 2022