82% of Spanish fashion companies estimate that price pressure will continue to affect the sector in 2022, according to the report 'Fashion Value: Pricing in the fashion industry', prepared by Modaes.es with the collaboration of Kantar and the Sponsored by Clearpay.

The study, which has included the participation of some of the main fashion operators in Spain, reveals that 67% of the companies in the sector estimate that price pressure in the sector has been on the rise in the last year.

Specifically, among the companies surveyed, 76% have taken initiatives in 2021 to reduce their promotional activity and increase sales made at full price. The most popular actions among respondents were brand building, increased customer loyalty, and an investment in product improvements. 81% of the companies that participated in the study reject that in 2022 they will intensify their promotions or reduce their prices.

Significant reduction in spending on fashion per inhabitant

After more than a decade of a general increase in discounts and rebates in the sector, a trend that has caused a significant reduction in spending on fashion per inhabitant in the country, which continues below pre-2008 crisis levels, companies are facing an increase of raw material prices that threatens to affect its margin.

In this sense, the companies participating in the study point to various factors when determining how they have reached the current state, in addition to the price war. One of them is the accumulation of stock that has dragged on since 2020, when demand plummeted due to the circumstances that COVID-19 brought with it. Another factor is a consumer already accustomed to highly competitive prices for clothing and footwear, as well as the rise of low-cost chains since the Great Recession.

The directors of the sector are self-critical with their own management: the average assessment of the measures taken in the fashion sector regarding price policy is 3.5 out of ten, as collected from the data in the report.

Source: modaes.es