Beyond price increases: How fashion retailers can drive real growth

This article is provided by by BRC Associate Member, Simon-Kucher.

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UK fashion retail is facing a challenging start to the year. Footfall throughout 2024 was lower year-over-year (BRC), with early 2025 seeing a brief recovery thanks to factors such as heavy promotions. Online sales account for nearly a third of all purchases, offsetting some in-store declines, but the industry is in a state of reassessment. Fashion retailers—across high-street and luxury segments— recognise growth will require more than just price increases.

The challenges ahead for fashion retailers

While 2023 and 2024 saw price hikes to manage costs, fashion retailers face both ongoing and new obstacles:

• Cost increases in 2025: National Insurance increases and evolving tariffs will place financial pressures on businesses.
• Supply chain re-evaluation: Geopolitical shifts and rising costs are forcing brands to rethink sourcing strategies and operations.
• Sustainability pressures: While interest in sustainability remains strong, many shoppers—particularly younger generations—are hesitant to pay a premium for eco-conscious products.
• Price fatigue: After two years of price hikes, consumers are reassessing the value they get for their money, potentially impacting customer loyalty.

Brands need to rethink their pricing, product strategy, and overall positioning to maintain relevance and drive sustainable growth.

Rethinking growth strategies across the fashion retail market

Fashion brands must tailor their strategies based on their positioning in the market.

High-street fashion: Balancing assortment, pricing strategy, promotions, and customer engagement

For high-street brands, pricing and promotions remain essential—but overuse of discounts and markdowns can erode brand value and profitability. Instead, retailers should focus on:

• Optimising product assortment: Brands need to consider their price architecture. With consumers’ budgets shifting, it’s critical to offer a mix of entry-level and core products that align with spending habits. Fast fashion sets the pace for trend adoption, but high-street retailers should be cautious about chasing trends that stray from their core identity to avoid a race to the bottom. Multi-brand retailers must balance pricing with margin-friendly private labels for a profitable mix.
• Smarter promotions: Promotions should be strategically planned, using customer data to drive targeted discounts rather than blanket markdowns. In the UK, a promotion reliant market, customers expect deep discounts of 40-60%+ during sales. While these limited time offers have value, a diversified approach with online and omnichannel personalisation can maximise sales while maintaining margins.
• Cohesive end-to-end pricing process: Pricing shouldn't be an afterthought but a key part of an integrated ecosystem across merchandising, inventory, and customer engagement. Shifting to proactive, data-driven pricing requires seamless alignment across product design, assortment planning, and promotional strategies. A well-structured pricing architecture maximises margins while maintaining customer trust. By embedding pricing considerations into every stage of the commercial process, brands can enhance agility, optimise sell-through rates, and sustain competitiveness without over-relying on price increases.
• Re-engaging with customers: Brands positioned between premium and mass-market need to redefine their customer relationships and prove their value beyond price, particularly as some shoppers have downgraded from luxury brands. These customers demand better quality and differentiation. For some retailer-manufacturers, this may require a reassessment of brand identity—clarifying their vision, target audience, and marketing approach rather than relying on luxury fallout.

Luxury fashion: Reinforcing exclusivity and value

Luxury brands have historically relied on price resilience, with price increases of 50%+ in the last two years. But in today’s climate, even aspirational shoppers are re-evaluating their spending.

• Product and pricing strategy: Brands must assess whether price increases align with customer sentiment. True luxury brands should avoid promotions, focusing on product exclusivity and inventory management to protect brand equity. Balancing core, evergreen products with limited-edition, high-margin collections keeps consumer excitement high. Luxury brands should refine how they introduce entry-level products—offering a gateway to higher-value purchases while preserving their premium image.
• Reviewing brand experience: As luxury prices rise, many customers are rethinking their purchases. With availability of high-quality imitations, some adopt a ‘high-low’ spending strategy, choosing fewer but more meaningful luxury purchases. This, alongside a shift toward premium brands with accessible pricing, pushes luxury brands to reassess offerings—leaning into emotional and experiential factors to justify premium pricing. In-store and post-purchase experiences—like concierge, customisation, and sustainability-driven aftercare (e.g., tailoring)—add perceived value. However, brands must personalise these experiences to reinforce their unique identity.

Competing beyond fashion: The changing consumer wallet

Fashion retailers are no longer just competing with each other; they are competing against a range of discretionary spending, including:

• Experiences and travel: Many consumers prioritise experiences over material goods.
• Wellness and self-care: Health and fitness products, including athleisure, are attracting more disposable income. Athleisure remains a strong category, but as competition grows, brand differentiation and credibility are key.
• Technology and digital goods: Consumers continue spending on digital products and services, further challenging traditional fashion spending habits.

Beyond these trends, brands seek ways to embed and blend fashion, wellness, and experiences in consumers’ lives. To win in this dynamic market, brands must sharpen their value proposition, ensuring every product and price point aligns with consumer expectations. The key to growth is not just about price adjustments but about reinforcing brand relevance and customer loyalty.

How Simon-Kucher can help

We help fashion retailers navigate these challenges by refining pricing strategies, optimising product assortments, and strengthening brand positioning. Our expertise in pricing, sales, and marketing strategies ensures brands can drive profitable growth while staying relevant in a rapidly evolving consumer landscape.

Ready to unlock sustainable growth for your brand? Contact us today.