Price Up or Quality Down
January 7, 2008-- Home Textiles Today,
We've been hearing rumbles for most of the last half of 2007 about price increases this year from suppliers in all parts of the world.
Just thinking about energy costs in factories, as well as shipping cost increases — both due to fuel price increases — should make believers of the entire marketplace. When you think of how many queen multi-piece comforter/room sets fit into a container for $229 apiece, vs. the number of cashmere scarves or sweaters in the same price points per unit, there's no question where the price/value ratio lies — and which goods are going to get on the ships.
But moving back to the basics of the home textiles and decorative fabrics industry, there's no question that either prices will go up — or quality will come down. An awesomely astute businessman queried me during lunch at Showtime last month with this challenge: "If I've been buying my cotton t-shirts at Wal-Mart for years at $4.99, I don't want to pay more for them." When he was told that either the price would increase or the quality would come down, he was outraged — and disbelieving.
The home textiles world has long been able to disguise price changes with slight of hand activities like cutting an inch off the length and width of a sheet, changing the construction of a towel, "adapting" new technologies to fiber and finishing processes, and changing the printing methods for patterns.
The governments of the countries where much of the production for home textiles and fabrics are produced are being challenged with many factors that will lead to price hikes — from incipient labor wage demands, to eco-participation, to global currency challenges.
We're in an era where nothing is cast in concrete — or even in whipped cream. What you see is not always what you get. And this year with costs escalating in everything from the petrol that creates fibers to the energy that helps make the end products, there is only one conclusion that can be drawn — prices will be going up.
The interesting thing will be the evaluation of quality in the major retailers' private label programs, to see how the current products stack up against what will be coming in later this year under the same banners. The testing labs should have a field day!
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Live from Intertextile in Shanghai