20 July 2007, 10:15 AM
  • Over half of those who work in retail expect ethical sourcing to drive up production costs by at least 5%, according to analyst, Verdict Research.

Fourteen percent even expect to see the increase exceed 10%. This information appears in a new brief by Verdict called The Future of Ethical Sourcing. It indicates that, although accounting for increased costs will be particularly challenging for value retailers, all retail professionals will be affected.

“With margins already under increasing pressure from escalating rents and fixed costs, finding a way to absorb the ethical sourcing expense will prove crucial to the profitability and survival of many retail businesses,” says Verdict.

The brief also explains that sourcing in compliance with high labour standards is increasingly considered as basic feature of a product and the extent to which it adds value has lessened. It believes retailers are turning to alternative methods of adding value to justify higher price points.