As high inflation made many people more price-sensitive, businesses with low prices such as Primark and Shein are attracting customers in the US. GU opened its first location in the US earlier in October 2022, selling $60 puffer coats and $30 knitwear. GU, a subsidiary of Japanese fast-fashion retailer Fast Retailing Co., sells apparel and accessories around 20% less than those sold by Uniqlo.
Similar to how fast-fashion stores such as H&M and Zara did a generation ago, this new batch of discount merchants hopes to upend the US apparel business. Shein, Primark, and GU do not make customers wait for promotions and discounts; they have affordable prices every day.
In recent years, low-cost clothing retailers such as Walmart Inc., T.J. Maxx, and Ross Stores Inc. have been pulling customers away from full-priced shops. For stores such as Gap Inc. and Macy's that are already dealing with customers who are suffering from inflation and the uncertainty around consumer spending, the land grab is raising the stakes. The retail market value of clothing in the US increased in 2022 in comparison to that in 2021, according to GlobalData.
Spending by American consumers decreased in September 2022 over that in the previous month as increasing costs made everything from food to electronics more expensive. Consumer prices increased at the fastest annual rate in four decades, excluding those for food and energy. Prices for clothing increased 5.5% from a year ago in September 2022.
By October 2026, Primark, owned by Associated British Foods PLC, expects to have 60 locations in the US, from 13 at present. Shein, a Chinese online retailer well-known for its affordable and fashionable clothing, is expanding in the US by constructing additional distribution centers despite recent social media outrage regarding the negative environmental effects of fast fashion. Low-cost retailer, Forever 21, announced in October 2022 that it aims to open 14 new stores in the US by June 2023 with new owners after exiting bankruptcy in 2020. In addition, consumers continue to shop at fast-fashion retailers H&M and Zara.
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