Consumer prices for apparel continued to rise in January, demonstrating that apparel companies are focused on profitability amid a volatile environment for supply and demand.
The prices that consumers paid for apparel rose 2.2% in January compared to the core index, which remained relatively flat with a monthly gain of 0.3%, according to data released by the Labor Department on Wednesday.
The rise in apparel prices marks three consecutive months of increases and is a stark contrast to the deep discounting that occurred early in the pandemic when apparel companies rushed to liquidate their inventories to free up cash flow.
More recently, apparel companies have faced a new challenge of actually getting inventory to consumers. The global shortage of shipping containers has left apparel companies struggling to keep popular items in stock and has pushed up import costs.
Domestically, with the rise of e-commerce and free shipping becoming a consumer expectation, apparel companies are forced to manage rising parcel costs as well.
As a result, apparel companies have resisted the urge to rely on discounts to gain market share, a common strategy following the 2008-2009 recession, and have been able to pass along some of these cost increases to the consumer.
For more information on how the coronavirus pandemic is affecting midsize businesses, please visit the RSM Coronavirus Resource Center.
