Short-Term Shifts or Long-Term Movements: The US Apparel and Footwear Industry in Five Charts

The US apparel and footwear industry demonstrated resilience during the pandemic, recovering faster than the global market in 2020-2021. However, since 2022, rising inflationary pressures have slowed its growth compared to the world market, though it remains the largest, holding a 23% global share.

In 2024, US sales are expected to stay flat in constant terms, while better than in 2023, and to return to pre-pandemic growth patterns by late 2025 or early 2026. Persistent inflation and interest rates are squeezing disposable incomes, altering consumer behaviour and market trends. This article explores the impact of recent economic instability on the US apparel and footwear industry, examining both short-term fluctuations and long-term trends through five key charts.The resilience of menswear amid rising costs

Before the pandemic, US inflation and apparel and footwear prices were relatively stable. However, since 2022, inflation has surged, causing apparel and footwear prices to rise faster than usual. Moreover, womenswear and menswear typically grow or decline at similar rates, with the womenswear market being about 1.5 times the size of menswear in 2023. However, menswear outperformed womenswear in 2022 and 2023, with men less sensitive to price increases.

24% of women plan to cut spending on apparel and footwear in 2023, compared to 16% of men, marking the largest gender difference of 8% in the past four years

^{Source: Euromonitor International’s Voice of the Consumer: Lifestyles Survey, fielded January to February 2023}

The difference was 3%, 5%, and 6% in 2021, 2022, and 2024 respectively.Despite recent higher growth rates in the menswear sector, womenswear is expected to achieve a slightly higher CAGR over 2023-2028. Female consumers are likely to continue favouring fashion products and refreshing their wardrobes after reduced purchases in 2022 and 2023. This trend is particularly driven by the influence of social media and younger generations, who view fashion shopping as a key form of entertainment. This underscores the importance of continually evaluating consumers’ frequently used social media platforms and evolving shopping-related activities there.

Tightening budgets doesn’t equate to seeking low prices

While rising prices since 2022 have led US consumers to tighten their budgets on apparel and footwear, this doesn’t necessarily mean they’re seeking only low-priced items.

In 2023, the mass apparel and footwear sector's share grew from 44.1% in 2022 to 44.6%, while the mid-sector dropped from 43% to 42.6%

^{Source: Euromonitor International}

However, low price isn't the only factor for mass brands to survive, as evidenced by:

• Polarised performance within the mass sector: for example, Shein's growing share contrasts with Old Navy's decline, despite both targeting the mass market.
• Euromonitor International’s Voice of the Consumer: Lifestyles Survey: Low price ranks as the fifth most important feature in influencing apparel and footwear purchases in 2024, with fewer respondents considering it crucial since 2022, despite rising prices in the market.

The emergence of value hackers highlights a shift in consumer behaviour towards smarter shopping strategies and diverse preferences, prioritising value maximisation over mere discount seeking. Brands now need to effectively communicate their value propositions rather than solely depending on promotional tactics to succeed.Has consumers’ interest in sustainability waned? Yes and no

Sustainability has gained significant traction in the US fashion industry in recent years. However, amidst rising inflation and economic uncertainties over the past 2-3 years, interest in sustainable attributes for apparel and footwear has seen a temporary decline.

The proportion of US consumers prioritising "eco-friendly" features when purchasing apparel and footwear decreased from 10% in 2021 to 8% in 2023, then increased to 12% in 2024

^{Source: Euromonitor International's Voice of the Consumer: Sustainability Survey, fielded January to February 2021, 2023 and 2024}

Despite a recent decline, sustainability remains pivotal for the future of the fashion industry, driven by stricter regulations and rising consumer awareness. There are clear signs of renewed consumer interest in sustainability-related attributes of apparel and footwear as economic stability returns in 2024, as illustrated in the chart below. Also, organisations like the American Apparel & Footwear Association and the Council of Fashion Designers of America endorse initiatives such as California's proposed Climate Corporate Data Accountability Act (SB 253), which mandates annual emissions reporting for California-based companies with revenues exceeding USD1 billion.Distinguishing long-term and short-term trends for lasting success

In summary, the US apparel and footwear industry has navigated instability and change since the pandemic, underscoring the need for brands and retailers to differentiate between short-term fluctuations and enduring trends. While rapid responses to consumer demand shifts are crucial, understanding which trends are fleeting and which are enduring is key to developing effective strategies. For instance, while the recent dip in sustainability interest may not necessitate drastic strategy changes, the enduring trend towards value-driven shopping demands continuous attention to ensure sustained success and consumer loyalty.

Learn more about the long-term movements and short-term shifts in our report, Apparel and Footwear in the US, to explore winning opportunities.