Greece: price increase for clothing and shoes by 30%

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The aggravated situation in the Red Sea has sharply complicated maritime logistics. The most important Asian imports to Europe – auto parts, equipment, chemicals, energy resources and consumer goods – are under threat.

The impact of the crisis on the Greek market is expected to be immediate. A tripling of freight rates due to changes in the sea route of cargo ships from China and generally from Asia, and a delay of about two weeks, will cause prices to rise and delivery delays, experts say. According to the same sources, it is assumed that the price increase in the clothing and footwear category will be about 30%! This percentage is especially high given the precarious financial situation of consumers. The situation will have catastrophic consequences for the sales market.

This whole situation is already beginning to affect the profits of companies from various sectors, analysts at Bryan Garnier & Co. say. Among them is the French furniture retailer Maisons du Monde, which receives 75% of its products from Asia, with the vast majority by sea. Manufacturers of sporting goods are expected to suffer: Nike, Adidas, Capri Holdings.

According to experts, to prevent a collapse of the consumer goods market, Chinese companies will be forced to “take on” part of the price increase, given the fact that the Chinese economy is based on exports and a decrease in trade turnover can create huge problems.

Wherein In order to reduce costs, the composition of the materials from which goods are produced will probably be modified. The same sources suggest that Ultimately, the increase in retail prices will not exceed 12%.

Ultimately, however, “consumers will pay for everything.” And in those segments where it is impossible to quickly raise prices, companies will pay for more expensive logistics at the expense of reduced business profitability. According to estimates by the Italian Institute of International Policy Studies (ISPI), various types of products that are delivered to Europe from Asia by container ships could rise in price by up to 10%. The European Commission predicts “devastating consequences” in the coming weeks.

But all this is more like… dreams, if in the end the crisis in the Red Sea region drags on. At the same time, with regard to consumer durables, such as electrical appliances, which are manufactured in China, the same sources believe that delays in their delivery cannot be ruled out. As noted, something similar happens when ordering cars.

In contrast, imports of high-volume, low-price products that make their final price prohibitive due to high freight rates are likely to be suspended. In general, the disruption to the supply chain that was observed during the pandemic and quarantine is being repeated, with the only difference being that it is occurring on a smaller scale.

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