You May See a Spike In Your Clothing Prices, Here’s Why
You’ve got your favorite store, your favorite designer, your go-tos for functional fashion and a pocket-pleasing price. Don’t be surprised, though, if the tags have a higher-than-normal price next time you go shopping.
Apparel prices were up 4.2% in August 2021 over the past 12 months, according to the Consumer Price Index from the U.S. Bureau of Labor Statistics. Blame it, in part, on the pandemic. As Americans began to work from home, or lost their jobs, in March 2020, clothing sales came almost to a halt. NPR reported sales at clothing and accessories stores fell by 78.8% in the month ending in April 2020.
A Slow Recovery
As we saw with countless industries in the early days of the pandemic, some clothing manufacturers stopped production and laid off tens of thousands of employees, as did retailers. Stores stayed shuttered for months, and not all of them reopened.
Returning to pre-pandemic staffing levels has been tough, and that’s just one of the factors impacting the price of clothing and other goods.
“The increases come from the basic law of supply and demand: right now, demand is higher than current supply can fulfill,” said Adrienne Catrina, president of the Los Angeles-based Franne Golde clothing brand.
“Manufacturing costs are increasing across the board for various reasons: commodity price increases, labor shortages, increased labor costs and shipping backlogs that lead to higher freight costs,” she continued. “Much of this comes from the impact of the COVID-19 pandemic. Manufacturers and retailers can only absorb so much of the increase before some of the cost needs to be passed on to consumers.”
And while the United States has improved numbers when it comes to coronavirus cases, it isn’t the same in parts of the world where some manufacturing plants are located.
“Coronavirus infections continue to overwhelm clothing factories, mostly based in Southeast Asian countries, and the shipping industry,” said Michelle Ebbin, the founder of specialty clothing company JettProof, based in Australia. “This slows down the manufacturing and distribution of clothing to retailers and consumers across the globe.”
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Rising Costs for Production, Shipping
Taylor Adnan is the CEO and co-founder of Rad Sourcing, which is run by a team of product designers and international manufacturing experts. He laid out the reasons why the cost of apparel is rising.
The first is the energy crisis in China, which has the capacity to produce enough energy but can’t because of rising coal costs and mandatory shutdowns to save resources, he said.
“China’s ability to manufacture clothing in the short term will be affected, and while demand continues to grow so will prices if the energy crisis continues,” he said.
Then there’s the cost of shipping.
“The median cost of a standard rectangular shipping container reached prices of about $21,000 in September, nearly double the costs in July,” Adnan said. “A lot of companies are passing on these increased shipping costs to consumers, so expect this to increase the cost of clothing as well. Along with the increased costs, shipping companies are experiencing significant delays.”
Adnan also cited the increased costs of cotton. The availability of cotton in China has been affected by U.S. government orders as well as weather.
“Once again the increased demand from businesses opening back up coupled with supply limitations has caused cotton prices to jump to a 10 year high,” he said.
How Long Will Price Hikes Last?
When consumers will see a fall in prices probably is a ways off.
“For the foreseeable future, there will be an imbalance between supply and demand. Until supply comes back to pre-pandemic levels (or demand softens), costs will stay elevated,” Catrina said.
“Parts of the supply chain may remain at current levels for longer than others, or even permanently. As world economies are able to re-scale and manufacturing gets back to normal, supply will be able to catch up with demand, and many costs will go down. Labor costs, however, may stay high. The pandemic has highlighted the risks faced–and the skills required by–the manufacturing workforce, and this results in a need for increased compensation. This will ultimately impact long-term costs.”
She said leadership at Franne Golde is aware of the impact on customers and is trying to offset prices and timeline disruptions.
“We are producing our products locally as much as possible to avoid shipping delays and increased shipping costs,” she said. “We are also producing just enough to meet our projected demands in order to avoid overages, get product in quickly, and not pass any unnecessary costs on to our customers.”
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Last updated: Oct. 20, 2021