Retail and business management consultant Wazir Advisors have released a report that outlines a sharp fall in apparel consumption in the USA and European countries. Globally, new COVID-19 cases are projected to reach the acme between the time frame of end-April to mid-May. In line with this, the Boston Consulting Group, in its Epidemic Projection released on March 26, 2020, has revealed that Covid lockdown in most parts of the USA and EU will last at least till mid-July. This means that stores across these countries will have to remain shut for a total of 3-4 months. As stated earlier, staples, medicine and grocery will be on the priority list, the desire to flaunt fashion will take a back seat chiefly because of uncertain economic scenario and lack of occasions to go out.
Wazir Advisors have outlined that this will result in a drop of apparel consumption in the otherwise largest fashion markets of the world, the USA and EU by 40 and 45 percent, accounting to about US$ 300 billion.
“The USA, as a society, is more consumerist compared to Europe. Younger population with a habit of regular spending will cause US to maintain a tad higher consumption than EU during the lockdown period; and more importantly, faster return to normal consumption levels,” the report states.
It estimates 37 percent less consumption due to store closures in the US market, and the country’s GDP shrinking by 3 to 4 percent. Expected net impact would be 40 per cent lower apparel consumption in 2020.
Moreover, the McKinsey & Company’s new Global Health and Crisis Response report highlights that in Europe and the US, more than 65 percent of consumers expect to decrease their spending on apparel, while only 40 percent expect to decrease total household spending.