The boom is over! Spending is shrinking, supply is blocked, and cross-border sellers are facing difficulties

With energy and fuel costs rising and inflation continuing, consumers in the UK and the US are currently facing a serious household living cost crisis.

Demand for clothing products is slowing in the UK and US , with spending on clothing categories falling at a faster pace , according to the latest data from retail trade organisations in the UK and US.

In July , due to the high temperature heat wave and the arrival of the sports season, summer clothing sales in the UK performed well, with sales and revenue higher than any month in the first half of the year .

It is reported that UK retail sales increased by 0.3% in July , 2.3% higher than the pre-epidemic level, but as the cost of living limited consumer spending on "must-haves", British consumers' demand for clothing declined after July .

Meanwhile, the latest data from the United States shows that while local consumers are still spending more and making more impulse purchases than ever before , they are not spending on clothing.

According to the NRF, core U.S. retail sales rose in July, but sales of apparel and clothing accessories fell 0.6% month-over-month on a seasonally adjusted basis and rose 0.2% year- over-year on an unadjusted basis .

Inflation affects consumer desire and purchasing power. Consumer demand declines, which leads to inventory backlogs and a decline in factory orders.

Data from the China Chamber of Commerce for Import and Export of Textiles show that at the macro level, domestic textile and clothing exports grew by 11.7% to US$156.49 billion in the first half of the year. However, domestic textile and clothing factory orders were bleak in the first half of 2022 , with about US$6 billion in orders canceled. It is expected that the value of canceled orders in the second half of this year will climb to US$10 billion .

In addition to the impact of declining consumer demand, the clothing sector is also affected by the supply crisis.

Affected by the recurring COVID-19 outbreaks and the implementation of the country's high-temperature power-rationing policy, the frequency of factory shutdowns in many parts of the country has soared this year, resulting in supply disruptions .

As the world's largest clothing exporter, China almost controls the lifeline of the global clothing market. Therefore, once the factories stop operating , the supply chain of this market will face a break.

China is also an important textile supplier to many major garment exporting countries in Asia. As domestic textile production chains have also been disrupted , garment factories in many Asian countries are facing shortages of raw materials such as yarn and fabrics .

Consumption and supply are hampered, and sellers have to compete with retail giants that are discounting and clearing out inventory. Some sellers said that due to too many goods accumulated in the past two years, overseas retail giants are now busy clearing out inventory , and clothing categories are even sold at prices below cost .

According to the survey , Americans' Christmas shopping intentions have dropped by 35% this year , while the British also said that their Christmas spending will be halved . The continued interest rate hikes by the Federal Reserve and the unprecedented high inflation rate in the UK have led consumers to be more cautious in spending, and the demand for goods has dropped significantly .

All these realities have made it clear how difficult it is for cross-border sellers to survive this year. This is not just the clothing market. As a medium connecting the supply side and the consumer side , sellers in many categories are also facing a double squeeze .

British and American

clothing