Fashion is facing a convergence of threats. In November 2025, US consumer sentiment fell to nearly the lowest on record, and remained well below pre-pandemic rates in the UK, Europe and China. Barring a reprieve from the US Supreme Court, tariffs will hit profit and loss statements hardest in 2026, after the inventory retailers pulled forward when the duties were announced has been exhausted, forcing them to either raise prices or sacrifice margin.
Shoppers continue to spend, but even those with money are doing so selectively and hunting for value in an uncertain economic environment.Between rising costs and pickier customers, retailers must preserve cash flow and prepare for tough times.
But companies that want to win in the long run must simultaneously continue investing in areas that will drive growth, from Al-powered operations to supply chain flexibility.
The balance is precarious….
