How inflation affects sustainable fashion

Paulina Kulczycki

Soaring inflation is causing a lot of hardship to the economy and thus, of course, also to the fashion industry. Increased transport prices and material costs are driving up the price of fashion immensely. However, it is not the cheap fast fashion companies nor the expensive luxury brands that are affected but mainly small, fair and sustainable fashion brands that already pay attention to environmentally conscious and ethical production. In our article, we shed light on how inflation affects sustainable fashion and what we can do to support virtuous brands.


Inflation in Germany

Through these two years of pandemic, countless small businesses had to shut down. Fair fashion brands were no exception, and some can barely keep their heads above water after such a long stretch of uncertainty. We at SANVT thought that 2022 would finally be the year where things get back to "normal". But as if the pandemic, lockdowns, quarantines, social restrictions and supply shortages were not enough, inflation started creeping in alongside the war in Ukraine.

In Germany, the cost of living has increased in 2022 more than at any other point in the last 40 years. We have to travel back to the autumn of 1981, and the first Gulf War, to find a similar inflation rate in Germany.

According to the Federal Office, consumers were paying an average of 10% more for goods and services this September than they did last year! And that’s the government-reported inflation rate; we citizens tend to observe an even steeper increase in prices.


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How inflation affects fashion

But inflation is not the only issue affecting the economy, our consumption and the fashion industry. Since the pandemic, the entire economy has been suffering from production and logistics disruptions. By itself, the pandemic has created an inflation of shipping and supply costs. The inflation that followed only perpetuates this state of instability for brands. But what does this mean for the fashion industry?  

Well, since luxury brands regularly adjust and increase the prices of their fashion collections anyway, they are quite unaffected by inflation. Business as usual, so to speak. On the other hand we have fast fashion corporations and discounters who even profit from inflation, as people have to resort to cheap alternatives and low-priced goods. So the extremes in fashion are less affected by inflation. But the demand for sustainable fashion brands is much more sensitive to price. Consumers that are on the fence are more likely to resort to their old habits of buying fast fashion goods, as a result of higher prices for sustainable brands. So how do sustainable fashion brands deal with inflation?

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How sustainable fashion brands deal with inflation

Many sustainable fashion brands are cutting their profits, as an attempt to not raise prices too much. In addition, many sustainable and fair fashion brands are opting for more local production with shorter transport routes. This way, at least the cost of delivery can be greatly reduced, and they can avoid disruption caused by the long-lasting effects of the pandemic. Furthermore, fashion on demand and limited collections are becoming more popular to avoid overproduction costs.

At SANVT, we have had our collections produced in small family businesses in Portugal since the beginning, which means shorter transport routes. We also offer permanent collections with sustainable essentials that don't change every season. This means that we have well-regulated fixed costs that don't fluctuate as much and are therefore less affected by inflation than alternating collections. So you can continue to buy fair, sustainable, climate-neutral and high-quality fashion at fair prices at SANVT!

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How inflation affects our consumption

Besides the question of how inflation affects sustainable fashion, it is interesting to observe what inflation does to buyers. Has it really changed the way we buy clothes? Given that we consumed much less fashion during the pandemic, there is a lot of catching up to do at the moment for many. After all, we want to go out, show ourselves to the world, and be seen, don't we? And according to surveys, the topic of sustainable fashion is still of great importance, especially for Gen Zs. After all, it's about the future of our planet – inflation or not.

Inflation makes us much more likely to forgo luxury indulgences in everyday products. But when it comes to pent-up consumption, such as travel and fashion, the effects of inflation have so far been less noticeable.  

Nevertheless, for many, sustainable fashion is a luxury they cannot always afford – and even less so if prices continue to rise. The higher inflation is, the more conscious consumers are turning to second-hand options to avoid putting too much strain on either their wallets or the planet.

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How inflation affects sustainable fashion: conclusion

How inflation has and will continue to affect sustainable fashion is still unclear. But in order to prevent smaller brands from being bought up by larger corporations or disappearing altogether, it is important that we continue to support our favourite small brands. Shopping local and fair is more important than ever! At SANVT, we recommend buying less but better, durable, high quality products that will serve you for a long time.

Download our Infographic about how inflation affects sustainable fashion here and share it with your friends and family.