Saturday 18 November 2017

The real cost of school uniform price wars

Huge discounts in schoolwear are a godsend for hard-pressed parents, but with garment workers on less than €30 a month, what are the ethics behind the low prices?

Smart value: Aldi is offering a school uniform pack for just €6.47
Smart value: Aldi is offering a school uniform pack for just €6.47
Costly: Mairead Galvin is feeling the pinch of sending her kids to school

Gabrielle Monaghan

Mairead Galvin's three children are busy building childhood memories of a long hot summer at their home just outside Waterford city. It's still only July but their mother, a freelance marketer, is already considering where she'll get their school uniforms.

Her five-year-old is starting school in September and her six-year-old will enter first class. She is planning to kit them out in a combination of uniforms from Marks and Spencer and Dunnes Stores and hand-me-downs.

However, she has ruled out bargain hunting in discount chains after a pair of €6 tracksuit bottoms she bought from an Irish chain fell apart at the seams before they were ever worn. "I learned my lesson," she said. "If you buy cheaply, you'll get cheap. If the quality is poor, you'll have to buy the uniforms again in the middle of the year."

For other parents on a tight budget who aren't restricted by their school to a supplier with a local monopoly, cut-price uniforms can be a godsend. After all, 52pc of parents spend an average of €196 on uniforms, a survey by online parenting forum Mummypages.ie showed last week.

Price wars have broken out in Ireland in the back-to-school market and Aldi is the most prominent to enter the fray. Since Thursday, it has been putting the squeeze on supermarket rivals such as Lidl and Dunnes Stores by offering a school uniform that costs just €6.47 a pack.

The pack, designed for children aged between four and 11, includes two polo shirts, a round-neck cotton sweatshirt, and trousers or a pleated skirt. Aldi claims the uniform is the "best value in Ireland", though it is only available for limited period, in what the discounter dubs a "special buy". Tesco's €6 uniform pack, which went on sale on Sunday, is cheaper, but contains just one polo shirt.

Smart value: Aldi is offering a school uniform pack for just €6.47

The Irish National Teachers' Organisation (INTO) expresses concern every year at the high cost of crested uniforms - jumpers and skirts at specialty suppliers sell for as much as €50 and €75, respectively. But as the uniform price wars heat up, the union has fresh worries; how discounters are managing to drive down schoolwear prices without exploiting workers.

Last month, Sheila Nunan, INTO's general secretary, said parents and schools should not be afraid to ask retailers whether their school uniforms are free from child labour.

Kate Nolan, a former fashion buyer for a high-street chain who made regular buying trips to India, has similar concerns. She now runs the Irish brand of the Clean Clothes Campaign, a global network that campaigns for garment workers' rights. "When you break (Aldi's) price per piece of garment, it's an incredibly low price," she said.

"It seems like they are trying to get a larger share of the family shopper by selling back-to-school wear, and they are really prepared to slash their prices to do that."

Aldi and its competitors may be taking advantage of low cotton prices, which have been hovering near a two-year low in the last two weeks amid expectations China, which is sitting on half the world's reserves for the fibre, will start releasing its stockpiles on to the market.

Cotton specialists have used recent spot prices to estimate the cost of making a 100pc cotton sweatshirt in Bangladesh for a child aged 4-5, like the one that Aldi is selling for £1.25 (€1.58) in the UK (Aldi is charging €2.49 for the same garment in Ireland). As well as the raw material, uniform manufacturers also incur costs such as knitting and dyeing the cotton, labour and shipping.

The fibre itself accounts for the majority of the production costs, at about 70p. The cutting, trimming and sewing of the material, including labour costs, comes to around 7p, according to the specialists. The factory itself probably takes a profit of 11.5p from the final retail price, and the cost of shipping amounts to 5p.

That would leave Aldi with only 31.5p to pay for transporting the garments from sea ports to its warehouses and distributing them to its outlets. Fashion retailers typically sell clothes for at least four times the cost of the items arriving at the port, so Aldi's margin would be much lower, former buyers say.

Aldi may be taking the hit itself by selling the uniforms as a loss leader with the aim of attracting new customers to their supermarkets. Its Irish division declined to say whether this is the case or to give an interview with a buying director.

2014-07-26_lif_1932317_I1.JPG
Costly: Mairead Galvin is feeling the pinch of sending her kids to school

However, a statement issued by a spokesman said: "Aldi works effectively and efficiently to responsibly make operational savings. Rather than using these savings to boost margins, Aldi uses them to reduce prices for its shoppers.

"Aldi's business ethos of developing mutually beneficial partnerships with suppliers underpins this approach. It enables Aldi to offer shoppers some of the best value in Ireland, while supporting fair and ethical ways of working."

That strategy has possibly accelerated its growth in the Irish market. Sales grew by almost 20pc in the 12 weeks to June 22 as it ate into Tesco's market share, the latest data from Kantar Worldpanel indicate. Together, Aldi and Lidl have a market share of 16.3pc.

Nolan said that "price is not an indicator of ethics". Some upmarket retailers were using the Rana Plaza, a factory that collapsed in the Bangladeshi capital Dhaka last year, killing 1,133 people, but charged 10 times the price than Primark.

But Aldi's aggressive back-to-school offering has revived a debate about how fast fashion affects the workers who produce it. The Clean Clothes Campaign has estimated that the four million people who work in textiles in Bangladesh receive 2pc of a finished item's cost.

The legal minimum wage is just €28.60 (3,000 taka) a month, or 11pc of what the Asia Floor Wage Alliance calculates to be a living wage for the country.

Aldi said its uniform range is "ethically sourced from a reputable supplier". All of its suppliers must comply with its social monitoring programme. The German company was one of the first retailers to sign the Accord on Fire and Building Safety for factories in Bangladesh.

The Clean Clothes Campaign published a survey in April of what 39 clothing brands on the Irish high street were doing to improve wages in developing countries.

Some of the results gave cause for concern, but for consumers on tight budgets the problems of the third world can often feel very far away.

 

 

DO THE MATHS... THE BEST BUYS

ALDI

Sweatshirt €2.49

Two-pack polo shirt €1.99

Trousers or pleated skirt €1.99

TESCO

Sweatshirt €2.50

One-pack polo shirt €1.50

Trousers or skirt €2

LIDL

Boys’ jumper/girls’ cardigan €3.49

T-shirt €1.99

Leather shoes €7.99

DUNNES STORES (for age 4 to 6)

Girls

Pinafore €10

Two-pack blouses €4

TOTAL: €14

Boys

Crew-necksweatshirt €3

Pull-up trousers €4.25

Two-pack shirts €4

TOTAL: €11.25

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