Survey suggests consumer prices will rise 10% to 15%
April 13, 2011
NEW YORK — Consumer goods at retail are likely to rise by 10% to 15% later this spring and into summer, particularly in the apparel and home furnishings segments, according to a Capital Business Credit survey of manufacturers and importers.
The hike in consumer prices is linked to the increased cost of cotton and logistics, the financial products and services company said.
Nearly 95% of 70 manufacturers and importers surveyed during the week of March 14 said they expect the rise in cotton prices to affect goods with high cotton content, such as sheets, t-shirts and fabrics, and 44.4% expect prices of those products to increase by 10% or more.
Of those surveyed, 62% said logistics costs have increased more than 5% in the past year, and 64.1% of those who identified an increase in logistics costs plan to pass at least a portion of the hike along to the retailer and consumer.
CBC, whose business has an emphasis on the retail sector, surveyed companies in the apparel, housewares, home furnishings, fashion accessories and furniture industries that manufacture some or all of their products in China, India, Vietnam, Bangladesh and Pakistan.
CBC Executive Chairman Andrew Tananbaum said he expects the trend to continue into the fall.
“The findings of the CBC survey reveal there has been a fundamental shift in the marketplace and that this will have a direct impact on the everyday consumer. The increased costs of logistics and raw materials have created the perfect storm whose elements will be visible this spring and summer,” he said.
• Ninety-five percent of respondents have seen raw materials costs increase in the past 12 months. To deal with the increase, 89.9% will be replacing some cotton content with rayon and other materials.
• The rising price of oil is a major cost concern to 80% of respondent, with 62% saying that costs have increased by more than 5% over the past 12 months. While 35.9% said they are absorbing the oil price increases, 28.2% are passing the cost along to retailers or customers, and 35.9% are absorbing some of the cost and passing the rest on.