Clothes to get more expensive next year
Higher prices are expected to be passed on to end consumers as the continued appreciation of the dollar is expected to increase the purchasing prices of clothes and shoes for fashion shops. Dutch bank ABM ABRO’s economist Sonny Duijn says that consumers shopping for particular clothes will pay roughly five to ten percent higher prices.
Duijn reported that operating profits of clothing have declined by around 70 percent between 2010 and 2013. This drop led retailers to reduce their average pricing of items in order to stabilize sales, with the consequence of extremely thin profit margins.
The analyst thinks future fashion store price increases are necessary following the financial crisis of recent years, and ABN AMRO believes that with the recovering state of the economy retailers now have space to inflate their prices. Private consumption could grow by 1.9 percent this year compared to the 1.7 percent increase of last year.
According to the Dutch bank, consumers are prepared to accept the increase in both shoe and clothing prices.