The clothing and footwear sales maintained on upward year on year path in 2012 and January to September 2013, yet the growth pace tempered visibly compared to the previous two years, as consumers’ disposable income was negatively affected by wage freezes, rising unemployment and inflation. A solid proof of the shrinking expenditures on clothing and footwear is the poor performance of sales in Q4/2012, which is traditionally the best quarter of the year.

In 2007-2011, clothing and footwear sales recorded double-digit annual growth in nearly all months of Q4, but in Q4/2012, sales recorded positive year on year result only in December, namely 0.6% year on year.

The positive annual performance last year and in January to September 2013 was mainly propped by the expansion of the larger retailers, which generate a large part of the chain segment’s revenues. Retailers launched intensive promotional campaigns to meet changing customer preference towards cheaper products, but the price competition affected particularly smaller players’ financials.

The prospects for the clothing and footwear market remain linked to the overall performance of the economy and consumers’ disposable income. In the medium and long run, domestic demand will likely recover, alongside the projected performance of the overall macroeconomic environment. Our QuERI database reports show that the market demand for apparel and footwear will slowly pick up starting with 2013, after the decline recorded last year.

The clothing production volume continued to decline on an annual basis in January to October 2013, maintaining the downward tendency in the past years. On the other hand, footwear production recorded cheering 17.3% year on year growth in January to October 2013, vs 9.8% year on year drop in January to October 2012 and 8% year on year decline in full year 2012. The recovery this year is partially explained by low base comparison, yet local media noted that Polish clothing and footwear companies have started to move their production back to Poland.

The foreign trade with clothing and footwear maintained positive annual performance in 2012 and H1/2013, though for clothing items exports slowed down visibly compared to the previous year. On the footwear segment, exports accelerated growth in H1/2013, while imports’ annual performance slid in the negative area over the period, thus narrowing the trade gap narrowed to EUR 109mn in H1/2013, from EUR 163mn in H1/2012.