Price shock: Why clothes cost more

Price shock: Why clothes cost more

The cost of everyday items continues to rise.

Recent data from Eurostat indicate that consumer prices rose here by 8.2% during the year to the end of May.

This leads to higher costs at the checkouts – Kantar recently estimated that the average household’s grocery bill will be € 330 higher this year.

But not all price increases are the same, with a myriad of factors affecting different products in different ways.

To help you understand what is happening, we have taken a closer look at a selection of everyday foods. Everyone has seen significant price increases, but everyone has a different story to tell about the causes.

In this article we will look at clothes.

What happens to the cost of clothes?

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Clothes may not be a food need, but it would be a common purchase for many. With many large supermarkets now having their own clothing departments, it is also the type of product that can easily end up in your shopping cart.

According to the Central Statistics Office’s consumer price data for April, the price of clothing was 1.1% higher during the year, which is not too dramatic given what we see elsewhere.

But the data also showed that clothing prices had risen by 4.2% in April alone, compared to March, which is a big jump in a few weeks.

Footwear prices have meanwhile risen by more than 6% in the past year.

And what it points to is the beginning of increases that have been flagged by retailers, who are starting to break through to the checkouts.

Virtually all major clothing retailers have announced plans to raise prices – including Inditex, which owns brands such as Zara; Primark, who owns Penneys here; H&M, Next and others.

Some of these increases have already taken place – and that is part of what we see in the CSO data – but some have not yet come. Penneys, for example, said its price increases would come on their fall / winter stocks, so it’s really coming into effect from August.

At the same time, Next said that they expected to raise prices in the second half of the year – but when it does, it will be on average 6.5%.

So the clothes will probably be a little more expensive in the coming months.

What does it depend on?

Much of the clothing industry is highly dependent on the global supply chain.

Many major brands, both on the mass market side and the exclusive, luxury side, would have their goods produced in places like China, India or Vietnam and then shipped around the world to be sold in a store in the likes of Ireland.

So when the pandemic struck, the factories that manufactured the goods were closed – as were the ports that transported the goods around the world.

And we’ve been dealing with the backlog that all of this has created ever since, with the cost of shipping goods now many times higher than they were before.

But even if the clothes you buy are made in Ireland, they face a similar problem. This is because they probably have to import the material they use.

Most of the cotton comes from the USA or Brazil, wool can come from Australia or South Africa, China is the largest exporter of denim, linen and polyester.

Excluding some small businesses here that use Irish wool, or perhaps high quality linen or leather from Europe (which is more expensive to begin with) is the chance that even local manufacturers will face the same type of shipping problems as those who make goods in Asia.

But that’s just part of the story when it comes to clothes.

What does sustainability do to the price?

One of the major underlying trends in clothing in recent years has been sustainability – or the lack of it.

And this is something that many clothing companies are finally taking action to address – or at least they say they are. Although it is undeniably good, it unfortunately comes at a cost.

Exactly how much it costs depends on, but it will always cost more than the unsustainable, fast-paced structure that has existed in many companies for some time.

This is because sustainability means that a clothing company no longer focuses on finding the cheapest range of whatever material they use. Instead, they need to focus on whether the people who grow, produce and manufacture the materials are treated well and get paid properly.

They are also focused on ensuring that the product itself does not harm the environment – this can mean avoiding plastic-based materials such as polyester or nylon in favor of natural materials such as cotton; or go for better quality dyes.

Maybe they want to ensure that renewable energy is used in the production and transport of your goods – or at least that carbon dioxide emissions are compensated in some way.

And maybe they decide to set up a so-called closed loop system, where people can take in items they are done with and have them recycled into new products.

And each of these things they do add a small cost to each item they make.

But in addition to that, sustainability is also about extending the life of the clothes we buy.

Part of that is up to us as consumers – but it is also up to the retailers to make sure that what they sell will not fall apart after some wear and tear.

That means doing things to a higher standard – which costs more, per item, than core products from a far-away factory.

But sustainability should also lead to people buying less than they did before, because they do not have to exchange goods at the same rate.

So the average we spend on each item can go up – but the hope is that the total amount we spend on clothes remains the same, or maybe even drops a bit.

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