The pain of commodity prices

Commodity prices are at historically sustained high levels & their effect is being felt on the whole global economy, but particularly sharply by a number of specific retailers.  With Oil prices above $120 all costs are increasing, but it is the price of cotton that is currently the undoing of clothing firms with American Apparel the large US based chain issuing a new bankruptcy warning.  Due largely to crop and soil fertility failure cotton prices are sustained at 200cent per pound, more than double their historic level.  Consumers currently are simply not willing to accept these price rises being passed on leaving such retailers the very unhappy ‘piggies in the middle’.  Maybe falling commodity prices will be just round the corner to ‘save their bacon’ – sorry ;)

Notworths

Much talk was made of how the British public no longer liked to shop at variety stores when Woolworths went out of business.  At the time I was adamant that this was not the case and the media commentators had got it wrong.  There are many current success's within UK variety retail, just look at Wilkinson & The Range.  The real issue as I commented at the time is that Woolworths senior management was not strong enough.  So it comes as no surprise that Alworths the company led by ex Woolworths director has also failed at the end of last week.  With strong management variety store retail is flourishing in the UK.  Woolworths had a strong brand and strong product mix both factors that have been rescued, but lets not try to rescue the management 'talent' that led to Woolworths original demise.