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Clothing Industry Faces Dangerous Dilemma
Feature: 12/1/2011

enny’s Uniforms, the UK’s leading chefswear and front of house supplier to the hospitality industry, is concerned about the serious pricing problem facing the clothing sector. A number of the larger buyers and operators are currently taking a bullish stance and stating that they will not accept price rises in 2011.


Sales director, Dominic Green states: “Customers cannot simply bully their suppliers by using their corporate muscle. Suppliers must be brave and stand up to their customers and pass these increases on.”


With a total of 25 years industry experience, ten years first-hand within the hospitality and leisure sectors and 15 years of supplying catering clothing, Dominic is well-placed to comment on the dilemma facing the clothing industry and the impact it will have on the hospitality sector.

Dominic continues: “Following hot on the heels of the recession, we are now being hit, as never before, by the highest cotton prices we have ever seen. The problem is a classic supply and demand imbalance. Last year cotton crops were seriously depleted because of flooding in Pakistan and a poor crop in China, and until next year’s crops are in we won’t know how long this situation will last.

“In our sector we have seen cotton prices double in twelve months from 70 US cents per pound to 1.40 US dollars per pound in October. As both a wholesaler and a manufacturer we are hit doubly hard. We have had a number of our suppliers increase their prices and some have had as a many three rises in the last quarter alone.

“The clothing industry has not been used to prices going up. We have enjoyed a decade of price deflation and now with raw material, transportation and labour costs rising, this situation will be set to continue.

“The Denny’s and Le Chef brands are well known in the hospitality industry and are proud to have pioneered the manufacturing of a number of lighter weight fabrics. Our manufacturing processes and technological innovations have enabled Denny’s Uniforms to maintain our quality and style over the years with only small variations to the cost.

“High Street retailers such as Next have issued warnings of price hikes. Consumers are already stretched and facing increases in VAT, gas prices, food and train fares. Some retailers are prepared to take a hit on their profit margins in order not to lose sales. Commercial buyers are used to benchmarking prices year-on-year and looking for negative price inflation but with the unexpected spikes in manufacturing prices, they will have no choice next year but to pass the increases down the line.

“Traditionally in the hospitality sector, a tender process is used to appoint new suppliers whether they are supplying clothing or commodities. In most cases when putting costs into a tender the client will expect the supplier to allow for price fluctuations such as currency and fuel, and offer a fixed price for the full duration of the contract. In some instances the contract may include a clause that allows for price increases due to exceptional circumstances but this is not usual practise. These types of tender are going to be harder and harder to fulfil and unless the suppliers are strong enough to resist, I fear we will see more casualties in our industry.

“A number of the larger suppliers and operators are currently taking a bullish stance and stating that they will not accept price rises from suppliers in 2011. I think I speak for most people in our business in saying that we all work very closely with our buyers and try to offer good products and services at competitive prices. However, they in turn have to be realistic and understand that we are all affected by the global economy. They cannot simply bully their suppliers by using their corporate muscle, they must be brave and stand up to their customers and pass these increases on.

“The stance that Denny’s Uniforms is taking is to stand our ground. Our margins are realistic and our pricing structure has always been competitive. However it is a fact that if the cost price of raw materials goes up, our margins are so tight, we have no alternative but to increase the selling price through the supply chain.

“Moving forward it would be short-sighted to cut quality. Reducing labour and removing the features and benefits of garments would also be a false economy. Denny’s Uniforms will remain quality providers of well manufactured catering clothing at a fair price.

“The secret is to provide the best possible product at the best possible price.”

For further product information or to order a copy of the bumper 2011 Denny’s catalogue please contact Denny’s Sales Team on 01372 377904 or visit Denny’s website at www.dennys.co.uk

Dominic Green

 

 

Author: Catherine Christie
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