Shopaholics this is not the news that you will want to hear, it may be time to start saving any spare pennies you may have as the prices of clothing in Australia is going to sky rocket.
Apparently the increase will be due to a rise in the price of cotton and wool ccording Citi analyst Craig Woolford who spoke candidly to SMH about the impending changes that will be hitting our shores and why a lot of this is due to the increased presence of foreign fashion labels.
"Clothing prices decreased -0.3 per cent in the June 2016 quarter. Foreign exchange depreciation is beginning to impact retail prices."
"We expect higher inflation in the next 12 months given prices are rising for underlying commodities such as cotton and wool and clothing retailers look to offset the decline in the Australian dollar to maintain margins."
Although we don't know just yet exactly when retailers will be bumping up their prices, according to data conducted done by Citi, five retailers recorded double-digit gross cost increases in the last financial year to June 30, 2016.
These five retailers and the labels that they have are;
2. Woolworths ( who also own Big W)
3. Wesfarmers ( Target and Kmart)
4. Solomon Lew's Premier Investments ( Peter Alexander and Just Jeans)
5. Specialty Fashion Group ( Katies)
SMH said that these retailers have been challenged by the rise of foreign brands and their prices.
"The Reserve bannk has endorsed this view. A paper it published in June asked "Why has retail inflation been so low?" It concluded that intensifying competition, "in part driven by foreign entrants, has compressed gross margins, and firms have sought cost reductions, including through labour productivity gains, to maintain profitability."
“And the competitive pressure will rise as the profile international brands continue to expand in Australia. H&M is increasing from nine stores to 40, Topshop from four to 20, Zara will boost its store numbers by 30 per cent and GAP will boost numbers more than fourfold to 25.”
Eeeek... looks like we are going to have to find a new favourite hobby if these price changes occur!
Photo Credit-Paramount Pictures