Commodity prices: What’s the solution for retailers?

With commodity prices such as cotton wildly fluctuating, it’s hard to know how to respond if you are a retailer or vendor. Here’s my comment, recently posted on RetailWire:

It’s difficult to expect consumers to accept higher prices on clothing after years of flat-to-deflationary prices. One retailer recently reported a direct causation between price increases and falling demand: For every 1% price rise, they saw a 1% drop in units sold.

Retailers and suppliers are going to have to work harder than ever this fall to maintain retail prices. They may need to take cost out of a garment by using more manmade fibers, and they definitely need to find savings in sourcing and supply chain management. But in an atmosphere of high economic uncertainty, raising prices is a recipe for losing market share.

 

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