Recent insights from Consumer Edge shed light on changing consumer spending habits in the US, revealing an interesting trend. While fast fashion brands like SHEIN and Uniqlo are experiencing growth, luxury spending is facing a downturn.
SHEIN, a budget-friendly brand from Singapore, has gained a significant 40 per cent market share in US fast fashion, surpassing competitors like H&M. Meanwhile, Uniqlo saw a notable 28 per cent increase in 2023 and has plans to open more stores in the US and Canada in the coming year.
On the luxury side, renowned brands such as Louis Vuitton, Gucci, and Burberry are encountering declines in spending growth, except for Hermes, which saw a 15 per cent increase in the first ten months of 2023.
Michael Gunther, Consumer Edge’s VP, suggested that this split in performance might be due to a squeeze on people’s real incomes. This trend seems to impact luxury brands more, as their products typically come with higher price tags.
Interestingly, the report also highlighted a decline in younger US shoppers (under 35) for both fast fashion and luxury items. This shift could be linked to reduced disposable incomes, presenting a challenge amidst wider economic pressures.
Moreover, the report pointed out the potential rise of sustainability as a significant concern among US consumers, similar to trends observed in France and Italy. In these countries, there’s government support for repairing worn-out clothing and footwear, indicating a growing focus on sustainable fashion practices.
In essence, these insights paint a picture of shifting preferences in the US, favoring affordable fast fashion while luxury brands face a tougher market due to economic constraints and evolving consumer interests, notably among younger demographics.
