07 September 2000
Supplier margins in the beleaguered clothing retail sector face further pressure as overcapacity in production and falling sales continue to trigger price-cutting by retailers.
In its five-year forecast, retail consultancy Verdict predicted a toughening marketplace as people spend their money on home-related products rather than clothing. It said prices in the sector would continue to fall for the next two years. The middle market will be hit, but the discount sector will thrive, powered by high-quality, price-led operators such as Primark.
Dave Green at the National Union of Knitwear, Footwear and Apparel Trades said the survey confirmed the union's view. "It is a difficult period, given that manufacturers are still feeling the fallout from Marks & Spencer's decision to source abroad. The industry will not start to level out for some time."