European retail and apparel industry outlook remains stable, as inflation and supply chain woes curb recovery.
As per a recent report by Moody’s, the recent resurgence in coronavirus cases increases risks to the forecasts.
By following a sharp recovery during summer 2021, trading conditions will continue to normalize in the next 12-18 months.
Guillaume Leglise, a vice president senior analyst at Moody’s and the author of the report said, “Global shipping delays hamper the flow of goods, reducing product availability and increasing raw material and transportation costs.”
As a result, clothing, home improvement, electronics, and home furnishing retailers are most at risk of margin erosion.
Also, Moody’s expects investments in digital to accelerate and retailers to proceed with their digital transformation with convenience and discount formats.
Basically, retailers focused on luxury, discount or casual clothing will continue to outperform the sector.
The European retail and apparel sector’s outlook could be challenged by material deterioration in trading conditions due to renewed or shopping restrictions sustained supply chain disruptions prolonged inflationary pressures.