H&M reported on Thursday lower-than-expected quarterly sales as shoppers tighten their belts with energy and food bills soaring and the world's second-biggest fashion retailer struggles to compete with rival Zara. "The third quarter got off to a weak start, in common with the industry in many of the group's major markets," H&M, which does the bulk of its business in Europe, said in a statement. Measured in local currencies, sales were down 4%.
Zara owner Inditex's strong first-half results show its strategy of raising prices since early 2022 paying off so far, but it and other fashion retailers have to be careful not to overdo it with further hikes that may scare away shoppers, analysts said. The world's biggest fashion retailer said on Wednesday it would raise prices again in the second half of the year after spring and summer increases. Fashion manufacturers in Europe and North America continue to feel pressure from rising energy, labour, transport and raw material costs and so are likely to have to raise prices more.