While their exports have grown dramatically, political unrest and uncertainty has increased their costs, depriving them of the opportunity to achieve even greater increases. According to their trade association,
"In November, [garment] exports rose over 29 per cent but our target was about 40 per cent."It's a fair bet that at least some of that 29% increase is now hanging on sale rails or languishing in warehouses, waiting for some shopper to succumb to the lure of a hefty sale discount; many major chain stores still have large areas of the shop floor devoted to sale garments nearly a month after they first began to cut prices.
The major supermarkets, too, have been left with unsold items clogging up their clothing departments - cheap and cheerful their wares may be, but when the high street giants have slashed their prices to similar levels, the discerning customer is likely to head for the mall.
The clothing retail industry seems to have bought wholeheartedly into the belief that growth is infinitely sustainable, and, with a finite customer base, this means expecting everyone to buy more - the reasoning behind a major retailer's boast that its website has 'hundreds of new arrivals every week'.
Many of these new arrivals will be marked down within a few weeks to make way for the next shipment. The trouble with this strategy is that it ignores the inherent conservatism of many shoppers and the financial and storage constraints that place a natural ceiling on almost everyone's purchasing.
Prices are the lowest they have ever been in real terms as retailers compete in a race to the bottom, but much of this has been achieved at the cost of low pay and appalling working conditions for workers in the industry. Somehow it makes it worse to think that the results of their labours now sit neglected on a sale rail amid a glut of unwanted merchandise.
Meanwhile, other countries are getting in on the act, with India planning the kind of factory and dormitory combinations that have allowed China to undercut the rest of the world in manufacturing costs. Even allowing for new markets opening up in developing countries where second-hand clothes are currently big business, it's hard to see how these millions of garments will find a home.
Clothing sales surely cannot continue to grow indefinitely, whatever the manufacturers of Bangladesh may wish for.
You obviously have not heard of that strange concept of supply and demand. I believe you are anticipating a problem that at best will not occur and do the damage you expect and is only causing a temporary spike and will eventually find equilibrium again. It is only markets that governments interfere with and so influence that causes gluts and scarcities which unfortunately these days are all too often. So I would say take advantage of oversupply and pay less and be glad of it.
ReplyDeleteAntisthenes, point taken - though the demand levels appear to be set not by consumers but by retailers, some of whom appear to have had their fingers burned this season.
ReplyDeleteEquilibrium may well be restored, but what happens in the process may yet drive some of them to the wall.
" drive some of them to the wall"
ReplyDeleteIndeed that is how free markets are meant to work. Those who go to the wall have got it badly wrong those who survive will have learned a lesson and if they want to survive will not repeat the same mistake again. Retailers have to anticipate demand unless they work on just in time stock control which the best will try to do and mostly they will get it wrong but usually not as badly as they appear to done on this occasion. Normally over and under stocking is built into the business plan and will have no noticeable effect on the business but there are always exceptions to every rule.
where is the traditional outrage / boycotts etc of the evil sellers who have exploited the pooor workers ?
ReplyDeleteDoes getting a bargain sooth all this.
Antisthenes, omelettes and eggs, I know; I am looking at this from the ground level while you take the longer view.
ReplyDeleteMalpas, in a society where adults have little idea of and less interest in the origins of the food they consume, there's scant chance they can be brought to care about industrial practices overseas.
What we tend to forget when we decry johnny foreigner's business practices is that in the 19th century the UK were guilty of the very same things; sweatshops, child labour etc. It is the normal way of things developing nations are industrialising and so until they achieve the level of prosperity that we did when we improved pay and conditions they have no option but to carry on practices that we now with hindsight find distasteful. Boycotts and the like does these people no favours as it reduces their ability to improve economically and so change their working practices. Good intentions do not always good outcomes make as we so often find out to our and other peoples detriment. The left are a prime example as they are full of good intentions but how they go about achieving them more often than not causes as much harm as good. Being on the right of the political spectrum I see the difference between me and the left is that I ascribe to many of the same intentions as them although there are quite a few I do not but would achieve them in a very different way by considering consequences in advance.
ReplyDeleteAntisthenes, I agree with you entirely about left-wingers' lack of foresight, not least because I once counted myself among their number.
ReplyDeleteIt's a kind of collective hysteria - most of us grow out of it, but for those who continue to associate entirely with like-minded souls, it becomes a chronic condition.