Poles are cutting back on fashion spending, but it's not their top priority

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Poles are cutting back on fashion spending, but it's not their top priority

In 2022, according to our estimates, the retail market for clothing and footwear will once again see growth, driven by increased demand for clothing and footwear (along with the resumption of social life), rising prices, and the market’s increased volume potential (due to the influx of refugees from Ukraine). Inflation, in turn, is limiting real market growth (in real terms, we forecast growth of 14.0% year-over-year).

We would like to remind you that in 2021, the value of this market—as a result of a low base and pent-up demand from the previous year—increased by 22% in nominal terms, according to a PMR report “Retail Trade in Apparel and Footwear in Poland 2022: Market Analysis and Growth Forecasts for 2022–2027.”

We’ll be paying more and more for clothes and shoes

One of the key challenges facing the market now, and in the coming years, is the issue of rising prices. In 2022–2023, we expect annual inflation of approximately 14%. Prices for clothing and footwear will also rise, but at a lower rate than overall inflation. Price increases in other categories, however, will erode Poles’ purchasing power, influencing their purchasing decisions, including those related to fashion.

According to PMR Forecasts, inflation will peak in early 2023, reaching about 20%, after which price growth should gradually slow down, partly due to base effects. However, it will remain at a significantly higher level compared to previous years. Fashion retailers, whom we spoke with while preparing this report, are also the most concerned about the turn of the year.

Magdalena Filip

Deputy Head of Retail Market Analysis

The impact on household budgets is already evident

In August 2022, the PMR team conducted a survey using a purposive-random sample. During the recruitment phase, basic demographic variables—gender, age, and place of residence—were controlled to ensure that the sample structure was as representative as possible of the general Polish population. The survey showed that 80% of respondents already report cutting back on their spending (overall), but they do not see smaller purchases of clothing and footwear as their main areas for savings.

80% of respondents say they are cutting back on their spending

According to a PMR survey, the food service industry, in particular, may feel the effects of consumers tightening their household budgets. Among those who reported cutting back on purchases, 59% indicated that they are trying to spend less on food delivery, eating out, and going out on the town. This was also the category most frequently cited by respondents as the one where spending cuts are most significant. Next came retail segments with a high average receipt value (home furnishings, consumer electronics). Nevertheless, 45% of those cutting back on spending are doing so in the clothing and footwear category, although for only 5% is this the top category for limiting purchases. The oldest group of consumers is significantly more likely to report cutting back on fashion purchases (56% among those aged 55 and older, compared to 40% among those aged 34 and younger).

Where do Poles cut back on spending?

According to PMR, however, cutting back on spending on clothing and footwear does not, for the time being, mean that people are looking for other ways to supplement their wardrobes. People who are cutting back on fashion purchases are not more frequent customers at thrift, do not swap clothes or shoes more often, nor do they repair worn-out or damaged items more frequently than consumers who do not limit their spending on fashion.

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