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The effects of changes in key economic variables on the behaviour of businesses
Introduction
In this assignment I will be analysing the retail clothing sector and the effect that the key economic forces have on this growing industry. Macroeconomics is one of the main forces, which is concerned with the economy as whole; this continues to have a great impact on the clothing sector due to the changes in inflation, GDP, interest rates and unemployment rates. These economic factors will be analysed individually based on how they affect supply and demand for clothes.
About the retail clothing sector
Clothing retailing is becoming even more competitive as consumers are more demanding of price, quality and styling. The clothing sector continues to increase in growth by 3.5%pa due to the increase in fashion confident and demanding consumers. Purchasing clothes in recent years is seen as an essential whereas before it would be considered as a treat, this is due to the continuous celebrity trends, which has triggered demand. Clothing sector is increasingly diversifying by operating online; this has generated 57% more to retail clothing sales as consumers tend to spend much more when shopping online. As a result to the competition some of the retailers set low prices to stimulate demand and capture a large market share; however this has contributed success to retailers and not a fall in sales. Clothing sector is divided into several well known retail groups such as; Adams, Alexon group (Envy), Arcadia (Top shop, Dorothy Perkins, Burton, Miss Selfridge, Wallis and Evans), Benetton group, Espirit, Gap Inc, H&M Hennes, Groupo Inditex(zara and Bershka), Mango group, Marks &Spencer, Matalan, Monsoon, warehouse, principles, Mother care, New look group plc, Next retail, Peacock group, Primark, River Island