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Garment Prices Are Likely To Soar In The Next Few Years.

2012/2/23 13:58:00 17

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After 10 years of cheap street fashion, a new British study points out that in the next few years

Clothing price

It is likely to fly up to the sky.

The following analyses are made of the causes of the plateau and the possible impact on the garment industry.

Fashion shoppers in the UK have been spoiled over the past 10 years, and the costumes from head to toe can be ordered by themselves at the same price as those in the high French restaurants.

However, according to the Verdict retail consultancy company, the price of clothing is expected to increase by 4.4% this year due to the price pressure of retailers.

This estimate is based on an average increase of 0.3% in clothing prices in Britain last year.

Neil Saunders, chief consultant of Verdict, said that the biggest single factor is the cost of raw materials, and the most obvious is cotton prices.

Multiple price pressures are the main causes of the current situation, including the increase in the future value added tax (VAT), the rising price of raw materials and the wage increase in major supply countries, such as China.

Deflation is over.

The price is expected to rise after 10 consecutive years of low price. The past low price garments are mainly driven by the successful sales of Primark, New look, and supermarket chains.

Verdict indicated that from 1999 to 2006,

Clothing price

The annual decline is at least 2.4%, of which 4.1% is the largest in 2001.

However, compared with the impact of other fashion retailers, the price rebound will not be worse because of the low price trend of credit crunch and economic decline in recent years.

This does not mean that the price of ready made garments is coming to an end. Some of the cheap garments will be kept in the market. However, the price of cheap clothing has bottomed out, and it will rise again.

Even enterprises like Primark have increased their prices slightly and will continue to do so in the future.

For enterprises unable to make a large number of pactions, the market price part will be more difficult to deal with.

Saunders describes the rising clothing prices in Britain as "changing the rules of the game", because many retailers rely on low price and large number of business models.

If consumers reduce the number of garments they buy, chances are that they will need some unusual products that can enhance their social status.

Therefore, the new sales plan must be related to quality, fashion and inspiration.

Price is still the most important factor, but the sale of products will depend on what kind of functions it can provide emotionally or physically for consumers. Consumers do not care about buying more expensive products, as long as prices can get endorsement of product characteristics or benefits.

In terms of textile industry, Verdict predicts that the price of most women's clothing will increase by 15.1% in the next five years, while children's clothing will only increase by 4.1%. The main difference is that children's clothing items are not subject to class value added tax.

Procurement solutions

Verdict forecasts, due to mainland China's

Cotton price

And the increase of labor cost will lead to a global rise in the supply chain cost of brand operators. However, under the declining global demand, garment manufacturers have begun to try to maintain profits, so most brands will find it difficult to pass the high cost on to consumers.

One solution is to pay more attention to local procurement and to use cheaper suppliers, but some recent turbulence, such as Bangladesh, shows that cheap labor has its limits.

Sauders says that there is no simple solution to procurement, so Chinese wages are still attractive despite rising wages.

The cost of Eastern Europe has also risen recently, but local procurement is fast.

In fact, retailers should have a balanced supply chain combination. Some suppliers with temporary production lines can be used to support products that must be produced and installed as soon as possible, while others with preferential prices but less flexible suppliers can be used to supply some stable products.

Therefore, in the short term, retailers should try their best to offset the cost of the supply chain by pferring the procurement locations.

Verdict forecasts that clothing prices will increase in 4 years: 3.6% in 2011, 1.9% in 2012, 0.9% in 2013 and 0.5% in 2014.

The best case is that retailers will overcome difficulties rather than risk losing consumers who are price sensitive.

However, the real threat of the two decline may save trouble for street fashion and exclude the possibility of raising prices.

While it seems that fashion consumers will feel the pressure, retailers may also find themselves back in a tight competition and a declining sales volume.

Sauders stressed that in the medium to long term, the number of job opportunities and storefronts is bound to be affected.

The amount of consumer purchases is reduced, but the amount of money paid for each product has increased slightly, which means that consumers can not take care of so many retailers with their expenses, so some retailers will be out.

To cope with this situation, it is best to reduce stores and streamline manpower so as to save money and reduce downward demand.

Though

Price rises

It is undoubtedly a variable that controls the rules of the retail industry, but it also means that retailers share the cost pressure of suppliers.

What's more, selling clothing products of superior quality at a more realistic price is good for consumers and the industry in the long run.