Since establishing McCallum Linen in 2015 we’ve managed to keep linen prices low by absorbing increases in production costs by becoming more efficient and thereby minimising the need to pass higher costs onto customers. In many cases customers have not had price adjustments for over 4-5 years, however we are currently experiencing unprecedented cost pressures, which we know are being felt right across the economy. Some of these cost pressures have been well publicised, like fuel and freight costs, but others are specific to our industry, for example chemical and raw material costs.
Within the linen hire business the cost pressures are such that we can no longer absorb them and as a result they need to be passed onto customers via higher prices.
It is important to note however that with higher prices comes a significant investment by McCallum Linen to acquire new linen so that our customers will have new stock. This new stock will ensure your own customers of having a great experience when using your services.
When will the price increase come into effect?
1 June 2022
What is the price increase?
Price increases will vary customer to customer based on products ordered and distribution routes.
How will we be notified of the price increase?
Each customer will receive both email and written correspondence in the mail.
What new linen stock will be available for order?
Every item. All current linen will be removed from our inventory over the next month with new items replacing them.
How frequently will new linen stock be added to your inventory?
All linen items have a pre-determined useful life and are taken out of circulation when they reach this time period. Due to wear and tear, some items reach the end of their useful life quicker than others and will be removed from circulation if deemed appropriate. Generally speaking, new inventory is added into the pool every 3-6 months to top up levels that have dropped from natural attrition.
I've heard the term "RFID" mentioned, what is it?
RFID stands for Radio Frequency Identification. Basically, all linen items in our inventory will have a tiny microchip sown into the seam. This enables us to track who hired the item, the date is was delivered and when it 'should' be back within our warehouse.
Why would you need to use "RFID" linen?
RFID is a game changer. Historically, an item of linen would be hired to a customer and we would never know where that exact item is, when it was hired or whether we actually received the item back.
No other business that hires items would operate this way, but due to the amount of linen (25-35 tonnes of items being hired each week) it's impossible to record and track individual items without the help of RFID chipped linen.
What will you do with the tracking information?
In the short-term (remainder of 2022) we will monitor usage by our customers and understand the data before making any major decisions.
In the longer-term (2023 onwards) we will provide our customers with reports of their usage. We will actively be following up stock that isn't being returned within the allowable time periods and potentially charging customers additional hire costs for these items.
What if items aren't returned, or they're lost or damaged?
McCallum Linen will only provide linen to customers who have signed a hire agreement. This agreement will clearly state that any items not returned, or lost or damaged will be subject to a 'replacement fee'. All agreements will have a schedule of replacements stock prices.
I've never had a hire agreement - when will these come into play?
We're currently implementing a contract management program that should be ready in late 2022. We're aiming for all customers to be on new hire agreements in January 2023.