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Jennifer Marks

Higher Prices Arrive

RETAILERS WARNED higher prices would be coming in the fall, and so they have. Six months after completing the annual Market Basket survey, HTT revisited 10 leading retailers in the study to explore to what extent pricing had changed since February on key home textiles items that tend to be constructed entirely or mostly of cotton: Queen bed-in-a-bag, queen sheet set, queen quilt and a bath towel.

Top Prices Swing Up

CHAIN

AUGUST 2011

ITEM

FEBRUARY 2011

ITEM

% CHANGE

BBB

$249.99

Bed in a Bag

$199.99

Sheet set

+25.0%

Big Lots

79.00

Bed in a Bag

70.00

Sheet set

+12.9

Family Dollar

21.00

Sheet Set

20.00*

Sheet set

+5.0

JCPenney

335.00

Bed in a Bag

335.00

Bed in a Bag

0.0

Kmart

79.99

Sheet set/Quilt

69.99

Quilt

+14.3

Kohl's

209.99

Bed in a Bag

119.99

Quilt

+75.0

Macy's

535.00

Quilt

400.00

Bed in a Bag

+33.8

Marshall's

69.99

Sheet set

49.99

Sheet set

+40.0

Target

99.99

Bed in a Bag/Quilt

89.99

Quilt

+11.1

Walmart

84.76

Bed in a Bag

74.00

Bed in a Bag

+14.5

*Comparing only items available in February and August

Lowest Prices Swing Everywhere*

CHAIN

AUGUST 2011

FEBRUARY 2011

% CHANGE

BBB

$4.99

$4.99

0.0%

Big Lots

5.00

3.75

+33.3

Family Dollar

3.00

2.50

+20.0

JCPenney

10.00

8.00

+25.0

Kmart

3.99

1.99

+100.5

Kohl's

3.99

3.99

0

Macy's

12.00

18.00

-33.3

Marshall's

4.99

3.99

+25.1

Target

4.99

4.99

0

Walmart

1.97

3.42

-42.4

*Bath towel price comparison

     In most cases prices were up smartly - whether for the lowest priced items in the truncated basket or for the highest priced goods.
     Looking at the total basket - a combination of the lowest- and highest-priced baskets at each retailer - eight out of the 10 raised their prices. In order, they were:etailer — eight out of the 10 raised
     • Kohl's up 60.1%;
     • Marshall's up 36.4%;
     • Walmart up 29.2%;
     • Bed Bath & Beyond up 14.7%;
     • Kmart up 12.1%;
     • JCPenney up 9.2%;etailer — eight out of the 10 raised
     • Target up 8.2%;
     • Macy's up 3.5%.
     Big Lots trimmed its market basket by 9.3%. Pricing remained even on like items in the lowest priced basket compared to February. Where it pulled back was its top pricing. The biggest shift: retail on its most expensive queen sheet set dropped from $70 in February to $28 when HTT visited in August. Meanwhile, the retail on its priciest bed-in-bag jumped $20 to $79.
     Family Dollar also had a lower priced total basket in the August set; however, the Family Dollar store HTT visited had neither a queen bed-in-bag nor a queen quilt available, so the total basket assortment was smaller than those of its competitors in the survey.
     Eight of the 10 retailers raised prices on their opening price point baskets, but only three did so by double digits.
     Walmart, whose opening price point collection in the survey rose 52.2%, hiked pricing on a queen sheet set ($23.96, up from $19 in February), and queen bed-in-a-bag ($48.96 vs. $44), queen quilt ($56.88 vs. $20) but lowered the price on its OPP bath towel ($1.96, down from $3.42 last spring).
     Kohl's OPP basket jumped 50.3% , with pricing literally doubled on a queen bed-in-bag and up 33.3% on a queen quilt.
     Family Dollar, which had only two of four items available for comparison in the OPP basket, up was 60%, boosting the price of its least expensive queen sheet set 68% and raising the rag on its basic bath towel by 50%.
     Macy's, by comparison, drove down the pricing on its OPP basket goods even as it took double-digit price increases in its top-price basket.
     The total tag on Macy's OPP basket fell 36.6%, driven by big price reductions on queen bed-in-bag ($100, down from $400). Macy's actually raised prices on two items on its OPP basket, with the queen sheet retail up 110% and the queen quilt up 25%. Macy's lowered the price of its bath towel to $12 from $18.
     Target trimmed the pricing on its opening basket by 3.75%, primarily by knocking $30 off the retail on its queen bed-in-bag. All other retailers took increases in their OPP baskets.

Country of Origin

COUNTRY

FEBRUARY 2011

AUGUST 2011

China

62%

59%

India

23

17

Pakistan

12

16

Other

3*

8**

*Brazil, United States
*Bahrain, Brazil, Italy, Mexico, Thailand, United States

     Eight of the 10 retailers in the survey increased prices in their top price baskets, with all but JCPenney doing so by double digits:
     • Kohl's up 66.2%;
     • Family Dollar up 60.0%;
     • Marshall's up 50.0%;
     • Macy's up 30.0%;
     • Bed Bath & Beyond up 17.9%;
     • Target up 15.8%;
     • Kmart up 14.8%;
     • Walmart up 18.3%.
     Looking at the critical deployment of cotton in sheet sets, the survey found little change between February and August in the top price baskets. All-cotton constructions accounted for 90% of sheets among the 10 retailers in both visits. There was a shift, however, from all-poly to poly/cotton blends for the remaining 10%.

Sheet Construction
Top Price Points

February 2011February 2011August 2011August 2011

Sheet Construction
Opening Price Points

February 2011February 2011August 2011August 2011

     In the OPP assortments, however, all-cotton sheets dropped from 40% of the assortment in February to 30%. All-poly constructions made up 50% of the top-tier sheeting last winter, but gave way to blends in the fall set, with 30% of sheets combing poly and cotton and 30% all-poly.
     Many retailers have lately been saying the price bulge has peaked. Left unsaid is to what extent they will adjust retail pricing going forward.

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