‘Fashion sales are in structural decline and that has big implications for retailers’

On top of many cyclical pressure on retailers, whether fragile consumer sentiment or the financial strain of rising national insurance contributions, fashion operators are afflicted by a deeper, structural issue – the steady decline in apparel sales volumes over recent years.

Since peaking during the post-pandemic recovery in 2022, fashion retail sales volumes in Britain have been on a downward trajectory. ONS volume index score, which measures the quantity of goods produced, controlling for price changes, recorded a 4.2% decline in textile, clothing and footwear sales volume in 2024 compared to the previous year.

This trend continued into early 2025, with volumes failing to recover to pre-pandemic levels. The pressure is also building on ecommerce – online sales in the category fell for the second consecutive month in May.

Further evidence comes from Morgan Stanley’s analysis showing that after more than two decades of steady growth, per capita consumption of apparel has begun to stabilise in many developed countries (or even decline, as in the UK and Japan), a shift that could mark a watershed moment.

So why are clothing volumes no longer growing? And if apparel consumption is really hitting a ceiling, what are the potential implications?

‘Overconsumption fatigue’

One significant factor behind the decline is growing consumer awareness of the industry’s environmental impact. Global fashion players are said to be responsible for 10% of global carbon emissions – more than international flights and shipping combined.

This concern is especially high among younger consumers, who are more enthusiastically embracing the circular economy, purchasing second-hand items and generally buying less. New platforms like Vinted and Depop have helped transform second-hand shopping into an appealing alternative to new purchases.

As of January, over 50% of shoppers now buy second-hand clothing, a four-percentage-point increase from the previous year according to World Panel (formerly Kantar). The effect on first-hand consumption is evident – for instance, Zara shoppers who regularly buy second-hand products have cut their annual spending at the retailer from £145 to £106, according to the analytics company.

Beyond sustainability, a broader and perhaps more powerful behavioural shift is taking place with consumers increasingly questioning the need for excessive consumption.

“Retailers should avoid trying to play in too many spaces, or being all things to all people, and instead concentrate on their core strengths and more strategically aligned offerings”

This ‘overconsumption fatigue’ translates directly into fewer (and often higher quality) purchases. In the US, the grassroots movement No Buy 2025 is encouraging people to buy as few new products as possible. Tactics include promoting ‘no buy days’ and advising shoppers to block ecommerce websites and unsubscribe from marketing lists. 

Simultaneously, there’s a growing focus on experiential spending, with experiences taking precedence over material possessions. More and more discretionary spending is being redirected to travel, dining out, wellness and other activities seen as a form of self-expression and fulfilment, mainly among the under-45s.

Nowhere is this social shift being felt more acutely than in luxury. Luxury brands are experiencing a painful slowdown as key growth drivers – such as demand in the Chinese market – have stalled, and because of a general pullback in spending on high-end goods as their client base becomes younger, more diverse and discerning.

What retailers can do

While high-end brands are currently the ones feeling the pinch, fashion retailers across the board must consider what this fundamental change means in the long haul, and how to respond. One certainty is that competition for share of wallet will only get fiercer, and bold and innovative strategies will be needed to capture and retain consumers’ attention and loyalty.

In many ways, success will come down to the basics. Prioritising durability and quality – two leading purchasing factors for fashion buyers, closely linked to sustainable values – can help brands make sustainability more tangible, open up opportunities for reuse and resale, and strengthen brand narrative.

Experience and high-quality customer service will become even more critical differentiators. Many UK shoppers are already frustrated with their shopping experience, showing lower tolerance for long queues in-store or poor online checkout processes. To stand out, retailers should prioritise creating seamless and enjoyable experiences across the shopping journey, including through personalised marketing, loyalty programmes and best-in-class customer support.

Clear and focused value propositions will also be key to unlocking discretionary spending. Retailers should avoid trying to play in too many spaces, or being all things to all people, and instead concentrate on their core strengths and more strategically aligned offerings. Just as important as clarity about the value proposition is delivering consistently on the brand promise.

The current disruption offers opportunities for a go-to-market reset whereby retailers rethink their market entry and expansion approaches to align with the new priorities. This can unlock potential to simplify supply chains, consolidate facilities and repurpose underutilised assets, ultimately building resilience and adapting to the new reality.