Retailers Finding Ways To Cope as Cotton Prices Rise

Higher costs for cotton have skyrocketed over the last several months, forcing manufacturers and retailers either to eat the price hikes or pass them along to their customers. Clothing retailers say they are trying to wring as many costs as they can from their operations to keep a lid on clothing prices, but they also worry charging more for a pair of jeans or a shirt will hit consumers particularly hard at a time when they find themselves already burdened with higher food and gasoline costs.

Cotton was recently priced at $1.97 per pound, compared with 77 cents per pound a year ago, a 156 percent hike, according to The Wall Street Journal. While clothes prices likely will rise throughout the year, the hikes seen by consumers should be mild — a couple of percentage points per quarter, said Frank Badillo, an economist with consulting firm Kantar Retail. “There will be an impact, but it will be spread among shoppers and suppliers and retailers,” Badillo said. “Retailers and suppliers will be taking margin hits, shifting their costs, shifting their resources.”

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