The United States and India can reach a trade agreement quickly if New Delhi takes strong, decisive actions, U.S. Commerce Secretary Wilbur Ross said on Thursday. “We do think that there’s no structural reason why there can’t be (a deal) pretty quickly,” Ross said on a panel at the India Economic Summit in New Delhi. He is set to meet one-on-one with India’s minister for railways and commerce, Piyush Goyal, with whom he also shared the stage at the event. “We each know the other’s issues, we have for quite some little while,” Ross said, adding that following Prime Minister Narendra Modi’s decisive victory in the parliamentary elections earlier this year, the Indian leader has “a very clear strong position in the parliament, (and it) should be a lot easier to take decisive action.” Washington and New Delhi have been locked in a trade dispute for months. For its part, the U.S. removed India from the Generalized System of Preferences (GSP) earlier this year, citing unequal access to the Indian market—the program, in place since the 1970s and aimed at developing nations, allowed India to export many of its goods into the U.S. market without tariffs. India responded by imposing retaliatory tariffs on 28 U.S. products, including almonds, apples, and walnuts. According to the Office of the U.S. Trade Representative, India was the 13th largest goods export market for the U.S. in 2018. The U.S. goods trade deficit with India last year was $21.3 billion, which was down 7.1% over 2017. On the trade front, one of the main focus for President Donald Trump’s administration has been to reduce trade deficits with countries and that included renegotiating some of the existing trade agreements. Washington is also engaged in protracted trade war with Beijing—both countries have applied tariffs on billions of dollars worth of each other’s goods, which has created global uncertainty and dampened economic outlook. Ross explained that while the focus is on reducing trade deficit, the U.S. will not stand for unfair trade practices even if they result in smaller deficits. “We believe that most of the things we’re requesting, particularly of India, would not only help U.S. vis-a-vis India, we think a lot of them would help India itself.” The U.S. wants India to lower tariffs on some of its exports, including motorcycles and certain agricultural products. In return, India wants preferential treatment restored on some of its exports to the United States, according to reports. A trade deal between the two countries was being speculated during Modi’s latest visit to the U.S., where he and Trump shared the stage at a massive rally. In his meeting on Thursday with Goyal, Ross said he will discuss ways South Asia’s largest economy can take advantage of the ongoing trade tensions with China. Expectations of a trade deal being struck between the two countries remain but it may not be a comprehensive one, according to Chandrajit Banerjee, the director general of the Confederation of Indian Industry. “I am pretty much positive that both U.S. and India would definitely move towards some sort of a deal, which might not be a comprehensive one, but in bits and pieces, there are many gives and takes that both sides could do,” he told CNBC. “I see no reason why we will not be able to moderate our position in some of them.” He added that both New Delhi and Washington acknowledge the importance of the other as a trading partner. When asked about the impact of the U.S. removing India from the GSP program, Banerjee said the move mostly hurt small or medium-sized companies. Reinstating that preference for India is going to factor in the negotiations, he explained.
One area of contention between the two countries is in India’s e-commerce sector, where in February, the government shook up regulations that affected giants like Amazon India and Walmart-owned Flipkart. Those companies were forced to change their business structure in order to comply with the new rules that were aimed at discouraging steep discounts to consumers. India has also restricted foreign direct investment in multi-brand retailers. Those moves are meant to protect small retailers, Goyal said on the panel. He explained his government does not change rules midway and that it provides “a very stable and predictable regulatory framework and where we find that there are concerns, we normally try to have a dialogue.” Ross said those changes likely dented Amazon’s willingness to invest more in its India business. “It probably would have spent a lot more in India, if it didn’t feel that there was a diminution in growth due to some of those policies,” he said, adding that India needs to figure out how to balance protecting small businesses without restricting the larger ones.
Source: Business Standard
The textile industry in the State is facing the worst crisis in years. Weighed down by high input cost of raw cotton, drastic drop in yarn export to China, huge power bills, non-availability of working capital limits, the industry is further crippled by delay in payment of arrears of industrial incentives amounting to nearly ₹1,125 crore.
“The textile industry is passing through an unprecedented crisis and most of the units are continuously failing to serve the repayment of their term loan instalments or interest to banks, and the accounts are slipping into NPAs on a regular basis. The spinning mills have already declared a weekly holiday on Monday beginning July this year,’’ Lanka Raghurami Reddy, president of AP Spinning Mills Association, told The Hindu on Monday. There are about 120 spinning mills in the State having a total number of 35 lakh spindles. With an investment of ₹10,500 crore, the textile industry is one of the main sources of employment. The production this year has touched 6,87,884 metric tonnes fetching revenues worth ₹7,842 crore through exports. The domestic sale of yarn alone has touched 2,75,164 metric tonnes per annum. The reasons for the drastic downturn in the industry are many. Fuelled by steep increase of minimum support price of cotton kappas from ₹4,400 to ₹5,500, the price of raw cotton has shot up to ₹49,000 per candy from ₹38,000. Adding to the woes of the industry, the State government is yet to clear arrears of industrial incentives to the tune of ₹1,125 crore, which is necessary to keep the credit worthiness of the company intact to get financial assistance from banks. The arrears include incentive claims for 2017-2018 worth around ₹290 crore and around ₹ 279 crore for 2018-19 totalling ₹ 569 crore. The delay in payment of sanctioned incentives in the last four years has forced many mills to down their shutters.
Source: The Hindu
UK''s Minister of State for the Commonwealth, UN and South Asia, Lord Tariq Ahmad of Wimbledon, is currently in India to further strengthen UK-India relations. Ahmad is also Prime Minister''s Special Representative on Preventing Sexual Violence in Conflict. While in New Delhi, Ahmad will promote the UK''s role as a force for good, working with India on major global challenges such as climate change and gender equality, celebrate the 150th anniversary of Mahatma Gandhi''s birth, and lay the foundations for a prosperous and strengthened trading relationship. Ahmad is expected to meet the Indian Minister of Minority Affairs, Mukhtar Abbas Naqvi, Minister of Textiles, and Women and Child Development, Smriti Irani, and Minister of Environment, Forest and Climate Change, and Information and Broadcasting, Prakash Javadekar, amongst others. Ahmad said: "I am delighted to be here in India, a place that holds a special place in my heart. The UK aspires to be a Force for Good around the world and I look forward to strengthening our collaboration with India on global challenges that are threatening our world, in particular climate change and gender equality." "As we leave the European Union, our partnership with India across an array of sectors from trade and education, to climate change and the rule of law will be more important than ever. I am keen while I am here to also build on the Living Bridge of people-to-people links that bind our two countries so closely."
Ahmad will also lay a wreath at Raj Ghat, meet the winner of the British High Commission New Delhi''s ''High Commissioner for a Day'' competition and visit Jamia Milia Islamia to speak to students about climate change, inter-faith, diversity and equality in India and the UK, the British High Commission said in a statement. Ahmad''s mother was born in Jodhpur, Rajasthan and his father in Gurdaspur, Punjab.
GDP growth in Q2 may dip below 5%; full-year forecast of 6% gets riskier, it says Economic activity in August 2019 was weaker than that observed in 2008-09 when the global financial crisis hit developed economies as well as India fairly hard, global markets research agency Nomura has noted in a report. Its monthly activity indicator (MAI), which is a three-month moving average of 19 high-frequency indicators, which include factory activity, services output, and trade and taxes, contracted 0.9 per cent over the previous year (August 2019 over 2018), the worst since when the data is available (2007). The MAI had grown 1.2 per cent in the June quarter. This meant that economic turmoil did not bottom out in the April–June quarter, the report said. That quarter saw gross domestic product (GDP) growing at 5 per cent, the slowest in more than six years. This could assume importance on the backdrop of an expected rate cut by the monetary policy committee (MPC) of the Reserve Bank of India (RBI) on Friday. Nomura expects the RBI’s MPC to cut the repo rate by 40 basis points, to take it to 5 per cent. “Railway traffic, cars and two-wheeler sales, medium and heavy commercial vehicles sales, and non-oil, non-gold imports are the indicators, which are the biggest drag on the economic momentum in August,” Sonal Varma, India and Asia ex-Japan chief economist at Nomura told Business Standard. Nomura was the first global agency to slash the growth forecast for the Indian economy to 6 per cent earlier this year. The RBI reduced the estimate of GDP growth in FY20 to 6.9 per cent in the August MPC meeting. The report also said that with this development, the downside risks to the annual FY20 forecast of 6 per cent have become stronger. Core sector companies produced lower than a year ago in August; imports also contracted during the same month, government data had shown. The MAI had always grown since 2007, Nomura data showed. This is the first time it has contracted since the pre-crisis years. Tighter financial conditions because of a crisis in the non-banking financial companies (NBFC) sector played a much bigger role than anticipated, the report said.
Source: Business Standard
To encourage Micro, Small and Medium Enterprises (MSME), the Punjab Government has launched the ‘Punjab State MSME Awards’ to felicitate the MSMEs, who have registered tremendous business growth and displayed excellence in product quality. Throwing some light over this on Wednesday, the Industries and Commerce Minister Sunder Sham Arora said that this initiative had been taken in line with the vision to recognize and promote the visionary spirit of the entrepreneurs of Punjab. All the eligible units can submit their online applications till 31st October 2019 by 5:00 PM on the Punjab Bureau of Investment Promotion (Invest Punjab) portal - http://investpunjab.gov.in/static/msmeawards. He said that the applications would be evaluated on the growth rate demonstrated by the unit (in areas such as investments in plant & machinery, direct employment, annual turnover/sales, direct exports), and product quality (evaluated through ZED certification, credit ratings, quality certifications). He also said that the holistic application also gives due credit to MSMEs adopting energy saving measures, focusing on employee welfare measures and promoting women in workforce participation. The detailed evaluation guidelines and instructions for application submission are available on the website. ''Under this award scheme, the winning MSMEs would receive a cash prize of Rs. one lac each and a Certificate of appreciation. The winners will be felicitated during the ‘Progressive Punjab Investors’ Summit being organized by the Government of Punjab at the Indian School of Business (ISB), Mohali campus during December 5-6, 2019. In total, the Government envisions the distribution of 18 awards, equally split across all the above nine industry sectors,'' the Minister said. ''Two awards will be given in each of the sectors - one to the Micro/Small Enterprises and one to the Medium Enterprises. He further pointed out that the Government had identified MSMEs as the engine for the socio-economic growth of the State and the backbone of the rising industrial development in Punjab,'' the Minister added. Those seeking online applications for the Punjab State MSME Awards under Industrial and Business Development Policy (IBDP) 2017, the Minister said that these are open to all the Punjab-based MSMEs operating in the Agro & Food processing, Automobiles & Auto parts, Textiles, Engineering, Pharmaceuticals, IT & Electronics, Sports, Hand tools, and Leather Industry. To be eligible for the State recognition, the MSMEs should have been in continuous production since the last three years (became operational on or before 01st April 2016) and should have a permanent SSI registration/ Udyog Aadhar Memorandum (UAM) under the Micro, Small and Medium Enterprises Development (MSMED) Act 2006. Under the IBDP, the State identifies MSME as a key sector and thereby extending attractive fiscal incentives, at par with the large units.
Source: KNN India
Out of more than 8 lakh looms in the township, over 40% are shut because of financial crunch. Bhiwandi, a city of power looms, was once known as the ‘Manchester of India’. Today it is on the verge of losing its identity. In the past, people visiting the city would be greeted with the rhythmic sound of looms, emanating from every lane. Khadipar, Nalapar, Darga Road, etc, were little hubs of industry – not only during the day, but also at night. The idea that one day this sound would fade away would ha ve been unimaginable back then. But that is exactly what has happened. The slowdown has had a calamitous effect on the power loom industry too. The city once had more than eight lakh power looms, and the textile hub was a guaranteed source of income for many workers who travelled from Andhra Pradesh and North India to work here. Today, 40 per cent of the looms are closed; and thousands have been sold because of lack of working capital. According to the Ministry of Textiles’ 2017-18 annual report, the sector accounts for 2 per cent of the GDP, 7 per cent of industry output and 15 per cent of India’s export earnings. Around 4.5 crore people work in it. The power loom sector contributes to 57 per cent of the total cloth production in the country, and more than 60 per cent of fabric meant for export is also sourced from it. The Bhiwandi Textile Manufacturers Association, Bhiwandi Auto Powerloom Weavers Association, Bhiwandi Powerloom Weavers Federation and the Bhiwandi Padmanagar Powerloom Weavers Association have written a number of letters in the past three months to Union Textiles Minister Smriti Irani, in which they have laid out the issues facing the industry. Loom owners and weavers say the current drop in overall textile demand is at its highest in six months. They also complain about the electricity tariff, heavy maintenance costs and GST issues. Many owners have sold their looms for scrap, while others have closed their units. Some have emptied their units and given them on rent to other businesses. Yasin Ansari, 60, is the face of Bhiwandi’s slowdown. He took us to his industrial unit, which is in the middle of a basti. We passed a homeopathic clinic on our way. Including an office, a godown and three units, he has more than 1,200 square feet space. “I had 120 power looms. I need money, so I am selling them one by one,” he said. “At my age I have no option. There is no other source of income. So far I have sold 60. I have to feed my family. I have already sold my house and we have moved to a rented space now. I was a khandani industrialist, but now I work part time as an accountant,” Ansari, who was wearing a bright white shirt and grey trouser, told Mumbai Mirror. In order to supplement his income, Ansari has also started goat farming on a small scale. Some of the animals were tied to the bolted power looms. His office is full of stuff like TV and furniture. “We don’t have space in our rented space to keep everything. So I have kept some of the stuff here,” Ansari said. Until recently, the office was busy. “There is the table where we used to check the quality of the material,” he said. The empty units have lowhanging tube light holders, the sort you see in other loom factories. There are spare parts on the floor. Parts of equipment lie outside, rusting in the rain. “I feel bad when I see this place now. This was a place of business, and now it is barren space. If I have to rent this out I have to invest some money in renovation – and I don’t have that money,” Ansari, who has five children and parents to feed, said. There were other units nearby, locked. The owners wouldn’t even discuss their problems, because they felt it would be “useless”. Sridhar from Sonpada said: “There have been problems for the past two year, but no leader is interested in the revival of our industry.” The Ministry of Textiles recently announced some assistance for modernisation of power looms. Rupesh Agarwal, who runs Khadipar-based New Krishna Textile, was one of those who applied for the benefits. “I took a loan for automation of my units because the government promised subsidy. Now here I am paying loan instalments, running around for subsidy money. It is very difficult to manage the business,” the young entrepreneur said. Pradeep Jindal, chairman of Bhiwandi Auto Powerloom Weavers Association, wrote in one of the letters to Irani: “The domino effect of job losses in textiles on other industries due to reduced consumption will be unprecedented. The subsequent rise in NPAs due to shutdowns may lead to a collapse of an already fragile financial system.” The associations fear that if the government allows import of textiles under the Regional Comprehensive Economic Partnership, a proposed free trade agreement between the 10-member states of the Association of Southeast Asian Nations and its six FTA partners, that will kill the industry. MY Momin, president of Bhiwandi Powerloom Weavers’ Federation, in a letter to the finance minister, chief minister and textiles commissioner, wrote: “The master weavers are winding up their business, causing unemployment on a very large scale. The workers should be financially aided… so they can start their businesses afresh. The decentralized power loom sector is facing starvation and has come to a point of getting totally wiped out.” Purushottam Wanga, chairperson of Bhiwandi Padmanagar Powerloom Weavers Association, pointed out that the government had reduced technology upgradation subsidy, from 30 per cent to 20 per cent. He requested that the full subsidy be immediately restored.
Source: Mumbai Mirror
Birla Cellulose has targeted to reduce its water intensity by 50% by 2025 from the baseline year 2015. This will be achieved by the application of new technologies based on the principles of 3R (Reduce, Reuse, Recycle). The best practices in the area of water management and innovations that allows multiple times reuse of water, and technologies such as membrane processes to clean up and recycle the wastewater have been applied across all fiber sites of Birla Cellulose successfully reducing the water intensity by 30% from the baseline of 2015. This has resulted in some of the sites creating new benchmarks for water intensity in the global viscose industry. Dilip Gaur, business director, pulp and fibre business, Aditya Birla Group, informed that climate change and water scarcity are the two biggest concerns of the global community today and need to be addressed by concerted efforts. A strong focus on reducing fresh water intake can result in fresh water being available for alternative uses. Reducing fresh water intake also leads to equal reduction of the waste water discharged, thus creating large positive impact on the environment. Gaur added that Birla Cellulose is in the process of applying the most stringent norms across all its fibre manufacturing sites, by going beyond the applicable regulatory norms, and implementing the European standards (referred to as EU BAT norms) for wastewater discharge. Water is the lifeline of every living entity on earth and is the most important shared resource on the planet. Water is a key resource for economic and social development and is vital to maintain health, grow food, generate energy, manage the environment, and create jobs. However, the world is grappling with severe water scarcity, as per a United Nations study, 2.1 billion people or about 40% of the global population live in water scarcity today. The textile industry is one of the largest consumers of water during production of fibre and fabric and for irrigation of crops like cotton, which consume large amount of water. United Nations Sustainable Development Goal 6 calls for ensuring the availability of clean water and sanitation for all by the year 2030. Aligned to the United Nations SDG 6, Birla Cellulose is committed to improve the availability of water, the most precious shared resource, for the people and the planet. It is in alignment to the strategy of Birla Cellulose of making the business more sustainable by being the leader in implementation of the sustainable business practices in the manmade cellulosic fibre industry.
Source: Manufacturing Today
Pakistan can beef exports to the EU by 15 times and not just in textiles (read more: “GSP Plus potential: 15x). In fact, textile is only one of the sectors that enjoy GSP Plus concessions to 28 European countries. Since Pakistan became a beneficiary in 2014, its exports to the EU have averaged 32 percent, against 25 percent in the period prior to signing the scheme. However, the potential is much greater. Current exports to European Union (EU) under the GSP plus status have been heavily concentrated in apparel and textiles products while other areas have not received the same attention. Textile products account for more than 70 percent of the total exports to EU. A study by the Pakistan Business Council in 2013 identified 74 items at 6 digits HS Code that appear to have a high potential for imports by EU from Pakistan after the GSP plus status. Some of the more prominent product categories that benefit from tariff exemption under GSP plus include leather, cereals, surgical goods and edible fruits to name a few. A closer look into leather and related products (HS code: 42) reveals a rather struggling picture. These products prior to GSP plus status were subject to 6 percent tariffs which were eliminated after the granting. Yet the sector managed to record a decline in leather goods exports. In fact, the interesting thing here is that EU’s import demand for these goods actually improved during this period. It is just not importing from Pakistan. Pakistan lost its share in EU’s leather market from 66 percent to 61 percent during FY14-18.Regional competition from China and India during the same period despite the disadvantage on tariff managed to perform better than Pakistan. From 2013-18, China saw a 1 percent increase in leather exports to EU and India recorded a 10 percent decline during the same period. Pakistan in comparison lost 14 percent value on its leather exports to EU during this period. This fall in share despite concessionary market share requires more scrutiny. It has been clear for a while that exports will not grow merely by attaining market access to trading partners, nor will just concessionary treatment help. It is important to look at the range of products under the GSP plus that have potential but (remain unrealized). To start with, aside from oft mentioned doing business indicators and broad based competitiveness indicators, firm-level challenges need to be studied. This is an area rife with opportunities for think tanks and researchers to explore.
Source: Business Recorder
Despite sharing a long border, Bangladesh is still a very tiny source for merchandise for India due to a lack of diversification of products and non-tariff barriers. India’s annual merchandise import amounts to $500 billion, in which Bangladesh’s share is only 0.2 percent, or a little above $1 billion, even though duty-free facilities have existed since 2011 for all local products save for 25 alcoholic and beverage items. In fiscal 2018-19, Bangladesh’s merchandise shipments to India were $1.24 billion, crossing the $1 billion-mark for the first time, according to data from the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI). Garment items dominate Bangladesh’s exports to India as its demand among the growing middle-income customers is high. Bangladesh also exports home textile, processed food, cement, furniture, leather and leather goods, but the volume is very small. Country-wise, India’s topmost import destination is China, constituting nearly 14 percent of its imports. India imports machinery, industrial raw materials, textile fabrics and food items from China. The other top import destinations are the US, the UAE, Switzerland, Saudi Arabia, Iraq, South Korea, Hong Kong, Singapore and Indonesia, according to the Directorate General of Foreign Trade (DGFT) of India. Region-wise, Asia accounts for the highest imports of more than 60 percent while Europe constitutes a little above 16.36 percent. India’s main import items are crude, gold, petroleum products, coal, pearl, precious metals, telecom instruments and organic chemicals. However, Bangladesh does not have those products. Still, exports from Bangladesh are growing mainly for the duty-free facility for garment shipments. Bangladesh’s garment export to India is on the rise thanks to the presence of global retail giants like H&M, Zara, Mango, Wal-Mart in the neighbouring country. All the retailers source from Bangladesh heavily. However, Abdul Matlub Ahmad, president of the India Bangladesh Chamber of Commerce and Industry, said some 40 Indian companies have their operations in Bangladesh and they send back the goods produced here to India, especially to the Northeastern states. “This is one of the major reasons for the high exports to India from Bangladesh,” Ahmad said. The non-tariff barriers (NTB) and anti-dumping duties on jute have had a detrimental impact on Bangladesh’s export to India, said Mustafizur Rahman, distinguished fellow of the Centre for Policy Dialogue. A lack of adequate trade facilitation is the most important NTB for operators on both sides, Rahman said. Imports from India are mostly raw materials for Bangladesh’s export-oriented sectors, particularly the apparel industry. Notably, 87 percent of Bangladesh’s exports to the US are garment items, which are, in part, made of cotton, yarn and fabrics imported from India, according to Rahman. Thanks to this, Bangladesh has a significant trade surplus with the US: $6.1 billion in 2018. “But reducing the bilateral trade deficit with India remains a major point of contention in the Bangladeshi policy circle and public opinion.” Bangladesh has not been able to take advantage of India’s growing appetite for imports. Indian imports exceeded $400 billion in 2018. “India is importing many items from the global market but not from Bangladesh. Bangladesh is exporting these same items to the global market but not to India.” Policymakers must remove the barriers to the bilateral trade flows through appropriate policies, Rahman said. About 50 percent of bilateral trade between Bangladesh and India takes place through land ports. The border points are not crossing points — they are control and checkpoints. Goods need to be unloaded and reloaded in ‘no man’s land’, leading to delays and cost escalation. In the absence of mutual recognition agreements, goods have to wait for several days until inspection results come from laboratory facilities in distant testing centres. The costs of transporting goods from Dhaka to Delhi are significantly higher than those from Dhaka to Europe and the US, he said. “Overall, the bilateral relationship is showing early signs of developing positively over the long term. But there is a long way to go if Dhaka wants to fully reap the potential benefits of deeper Bangladesh–India bilateral ties.”
Source: The Daily Star
Price sensitivity by consumers is falling, giving retailers the opportunity to offset the potential impact of tariffs by raising prices. That’s according to recent price elasticity study from First Insight, which found that elasticity and price sensitivity are falling in every category, including womenswear, menswear, children’s wear and home goods when compared to its previous 2017 study. First Insights’ “Decoding Price Elasticity: Emerging Opportunities” study examined pricing and price elasticity trends on hundreds of thousands of items processed through InsightSuite, the company’s predictive analytics platform, which enables retailers and manufacturers to effectively select, price, market and buy new products with no sales history. “Retailers must keep pace with changes in elasticity of demand across every subcategory to maintain solid profit margins and achieve financial goals, particularly when facing product cost increases due to tariffs,” said Greg Petro, CEO of First Insight. “Our latest Decoding Price Elasticity study reveals insights into product categories and offers retailers and brands visibility into how best to price a product to meet demand, protect margins, maximize profits, minimize risks and avoid problems with excess inventory, particularly as retailers consider ways to offset the potential costs of tariffs.”
Key findings of the study include:
• New opportunities in womenswear to increase prices in dresses, sleepwear, outerwear, bottoms, tops and lingerie: Womenswear is seeing continued decreases in elasticity overall and represents opportunities for retailers to maintain or increase prices. While in subcategories including handbags, swimwear, footwear and jewelry, retailers have been increasing prices in line with demand, opportunities for price increases exist in sleepwear, outerwear, bottoms, tops, lingerie and dresses, where retailers have been lowering prices.
• Menswear shows opportunities for price increases in outerwear and accessories, but may need to reduce pricing in men’s tops: Menswear sales continue to grow as men take an increasing interest in their outward appearance and specific fashion trends and brands, according to a recent Euromonitor study. While retailers are increasing prices in line with falling elasticity across footwear, bottoms, and underwear categories, pricing has been falling in outerwear and accessories, where shoppers are less price sensitive. Also, the price for men’s tops has been rising, where these shoppers are more price sensitive. Retailers should consider reducing the price of these items in order to avoid a decrease in sales and potential overstocks.
• Children’s wear is relatively well-managed by retailers, but shows opportunities to increase pricing on tops: As many parents, specifically millennials, wait until later in life when they have more disposable income to have children, they are less concerned about pricing when purchasing clothing for their children. This is driving down elasticity across almost every children’s wear category. Retailers have largely aligned with these trends, as dresses, sleepwear, and bottoms show increasing pricing. Footwear, which shows a significant rise in price elasticity when compared to the previous report, is also well managed as retailers have been responding with lower prices. The one poorly-managed exception is in children’s tops where pricing elasticity is falling, and retailers are decreasing prices, representing an opportunity for retailers to capture greater revenue.
• Pricing sensitivity drops across most home goods categories, with opportunities to increase pricing in decor and textiles: Elasticity has fallen significantly across every home goods category with the exception of housewares, according to the study. While in furniture, where retailers are increasing pricing in line with falling elasticity, retailers are incorrectly dropping prices in decor and textiles categories as elasticity falls. In housewares, where elasticity continues to rise, retailers are better managing this risk when compared to the previous report, and are lowering prices in line with consumer expectations.
Source: Chain Storage
Prime Minister Boris Johnson has come out with his ‘final’ Brexit proposals, warning European Union (EU) leaders that the United Kingdom will walk out without a deal on October 31 if the latter does not accept his terms. The plan includes several basic provisions, including a potential four-year time limit that EU leaders have rejected in the past. Johnson’s new solution, however, has reportedly evoked a cool response from Brussels. After having a telephonic conversation with Johnson, European Commission president Jean-Claude Juncker pointed to “problematic points that will need further work in the coming days”. Irish Prime Minister Leo Varadkar said Mr. Johnson's proposals “do not fully meet the agreed objectives,” although he promised to “study them in further detail”. “The first assessment of nearly every member in the BSG [Brexit steering group of the European Parliament] was not positive at all,” according to BSG head Guy Verhofstadt, who suggested the UK offer was not a serious attempt at reaching a deal but an effort to shift blame for failure to Brussels, according to global newswires. EU officials and British opponents of Brexit fear economic chaos, if the United Kingdom ends its 46-year membership of the European Union without a formal divorce agreement. Mr. Johnson said the sides had until October 11 to hammer out the main outlines of a compromise so it could be included on the agenda of a EU leaders' summit in Brussels on October 17-18. Proposing his own temporary customs arrangements, Johnson told Juncker the EU-backed backstop arrangement for the Irish border was ‘a bridge to nowhere’. As per Johnson's plans, Northern Ireland could temporarily continue to follow EU regulations. The UK government also announced on October 2 it would suspend parliament from October 8 to 14 so that Queen Elizabeth II could set out the government's new programme.