The reasoning behind the upcoming price changes is as follows:
Further increases to the cost of raw materials
Raw cotton has continued to rise and has now risen another 17% since September 2021 and 42% since January 2021. Polyester has again continued to rise by a further 19% since September 2021 and 24% since January 2021.
Container shipping costs
Average container prices have stabilised to around $14,000 to $15,000 per container – but the spread of prices has increased, with peak charges moving from $16,000 to $35,000.
Garment production and new COVID-19 variants
Garment production prices are starting to rise, due to a number of factors. COVID-19 lockdowns were imposed in manufacturing countries such as Bangladesh and China, due to the spread of the Delta variant earlier in the year, causing slowdowns and even stoppages in production and deliveries in these regions. Many factories in Myanmar (Burma) have also been closed down since the military coup in February, leading to higher demands from factories in Bangladesh and China. The new Omicron variant could further add to these issues.
General inflation in the UK economy
Inflation has continued to rise within the UK, in 2021. In September, the RPI was 3.9%; and in October, it was 6%.
There is also the extra pressure of the value of GBP vs USD. Since September, GBP has fallen from $1.38 to $1.32 – a fall of 4.3%. As goods and freight are paid in USD, this increases the landed price, although we have managed to offset some of this by booking dollars in advance.
If you have any further questions about price changes, please do not hesitate to get in touch.