Hit by soaring raw material costs and rising wages in Asia, UK clothing and footwear prices in September were up on an annual basis for the first time since 1992, according to Textiles Intelligence, the global information company.
Although the increase was only 0.9 per cent compared with September 2009, at 6.4 per cent the price increase between August and September was the biggest since records began.
News of these increases has coincided with warnings from a number of UK retail chains, including Next, Primark and Swedish chain H&M, of higher prices.
The main cause is a hike in the price of raw cotton. In the 18 months between March 2009-September 2010 it rose by 127 per cent – from 51cents a pound to almost 116cents per pound.
On top of the increases in raw material costs, many mills in low-cost countries are having to pay higher wages.
In Bangladesh, for instance, worker unrest and trade union pressure have led to an 80 per cent hike in the minimum monthly wage for the lowest grade worker over the past four years.
Rising wage costs, coupled with labour shortages, also continue to plague factories in China – especially in coastal regions.
With cotton prices likely to remain high for some time, according to Textiles Intelligence forecasts, prices on the high street are unlikely to fall to the levels that European and US consumers have enjoyed for over a decade.
