When we use zu + adjective, we are expressing the view that the quantity, size or intensity of something is not good, or not quite right. It means that the person using the expression finds something inappropriate or unacceptable.

Das Hemd ist zu teuer.

This can mean:

1. The price of the shirt is unreasonably high.

2. The price is reasonable but I do not have enough money to pay for it, or I am not prepared to pay that much for it.

In the second instance, the subjective meaning being emphasized is: for me, personally, the shirt is too expensive. To express this even more clearly, the personal pronoun in the dative case can be used:

Das Hemd ist mir zu teuer.

When we are talking about clothing, the following construction is often used:

Das Kleid ist mir zu groß.
Die Schuhe sind mir zu klein.
Die Hose ist mir zu lang.
Der Rock ist mir zu kurz.