Global fashion retail sales to grow by 2% to 4% in 2024

Uncertainty remains over geopolitical, economic volatility and inflation concerns.

The fashion retail sales globally are expected to post a slower but normalised growth of 2% to 4%, varying across regions and markets as uncertainty remains due to economic concerns.

In a report, McKinsey said the luxury segment will generate the biggest share in the market, with the segment increasing by 3% to 5%, slower than the 5% to 7% growth in 2023 as consumers control spending following the post-pandemic surge.

“European and Chinese growth is set to slow, while US growth is expected to pick up after a relatively weak 2023, reflecting the slightly more optimistic outlook there,” the report read.

China will experience a 4% to 6% growth in the non-luxury segment, which is a slight increase from the end of 2023 but the rate is considered slow on a historical basis.

The European market will expand by 1% to 3% due to the decline in consumer confidence and household spending, whilst the US is expected to post a 0% to 2% growth in the non-luxury sector.

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Geopolitics is the top concern for fashion industry executives for 2024, McKinsey noted, citing conflicts in Europe and the Middle East, followed by economic volatility and inflation.

Of the surveyed executives, 26% expect conditions to improve, but 37% expect it to remain the same and 38% see it worsening.

“Uncertainty within the industry reflects the broader economic situation, albeit with regional divergence. Going into 2024, pressure on household incomes is expected to dampen demand for apparel and prompt trading down across categories,” the report read.

“Still, there are geographic outliers that may offer comfort. One is India, where consumer confidence hit a four-year high in September 2023,” it added.