Suppliers to the UK’s biggest high street chains are feeling the squeeze as retailers seek to offset sluggish sales through their supply chains following a slow start to the year.
More and more retailers are asking suppliers for retrospective discounts and the pressure on margins is mounting, Drapers understands.
One footwear supplier said he had been approached by two value retailers this season looking for discounts on orders that have already been placed because of tough trading conditions.
“We had to put our foot down, we can’t afford it. If we lose money we don’t ask for it back from them. It’s bullying pure and simple and we won’t bow to it.”
“Margins are definitely being squeezed,” said one womenswear supplier to high street multiples.
“Everyone is looking at prices because they had a very bad winter and spring has been slow to take off. Shoppers are waiting for the weather to change before they buy. Some of the biggest retailers are really struggling at the moment.”
She added: “Our margins are going down and customers are not placing orders until they get lower prices. Factories won’t move on costs so it’s the supplier that gets it.”
Another young fashion supplier agreed: “Sales were really bad in the run-up to Christmas and trade has not been good so far this summer. As usual [retailers] have all the summer product in already and no one wants to buy it.”
“Buyers are more hesitant to order than they were before because winter just didn’t happen,” said another value fashion supplier. “Retailers haven’t sold jackets or scarves so they are reluctant to order more for next year because they can carry some of it over.”
One supplier that deals with both the premium and value end of the market said: “People are changing their minds by the second and are constantly rejigging prices to try and get the best margin. Everyone is sitting on their hands as they are scared to make a move. That reluctance to sign off orders puts further pressure on the supply chain as the cost of raw materials, labour and logistics go up. It’s the hardest season we’ve had for a long time.”