Your browser is no longer supported. For the best experience of this website, please upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We'll assume we have your consent to use cookies, for example so you won't need to log in each time you visit our site.
Learn more

Higher shop prices ‘in the pipeline’ warns BRC chairman

The chairman of the British Retail Consortium has warned that retailers are set for higher shop prices in the wake of the Brexit vote, thanks to the devaluation in the pound.

3015299 brexit 1

3015299 brexit 1

Speaking at the BRC’s Brexit debate, chaiman Richard Baker said that while some retailers had absorbed the shortfall initially, they would be unable to do so for much longer. “Inflationary pressure is building in the system,” he said. “While retailers are famous for their ability to manage cost increases without passing them on to customers, it’s not realistic to think that the devaluation will not, in due course, make itself felt in higher shelf prices.”

“We can be sure that there is upward pressure on shop prices in the pipeline,” he added. “It will not be possible for retailers to absorb all of the increase costs of the sterling devaluation indefinitely, and we expect some degree of pass-through to shop prices, probably focused in the first half of next year.”

Baker also noted that shop price deflation and slowing real wage and employment growth had “strengthened the headwinds facing the industry,” before the Brexit vote.

He warned that although effects had yet to be felt from the referendum, the retail industry must expect to feel the consequences in the coming months. “We can’t say we’ve avoided any significant economic consequences of the referendum – only that the potential impacts have not yet had time to filter through into sales,” he said.

“Brexit is not a “normal” economic event so it’s difficult to calibrate any model of the future with confidence. If anecdotal reports of postponed investment do become firm evidence of a widespread phenomenon and current independent forecasts for a significant slowdown in economic growth next year are realised, then that will certainly feed through into consumers’ wallets and ultimately to retailers.”

Readers' comments (6)

  • A bit different to his July comments. Maybe if the public had realised this before they might have voted In.

    Unsuitable or offensive? Report this comment

  • I don't think so. Besides, some brands will use this as an excuse to put the wholesale prices knowing full well that it won't be passed on by weak retailers. End prices should be going up anyway, but will they?

    Unsuitable or offensive? Report this comment

  • The prices have to go up for Spring-how can importers hold their prices-we are the ones working on pennies-not the retailers. Retailers will either have to pay the increases or pass them on.

    Unsuitable or offensive? Report this comment

  • Of course retail prices will have to increase, wether its clothes or food or anything that relies on any imported components. Perhaps when the economy has stalled, inflation has increased and investment in the UK reduces considerably, those that voted to leave the EU will see the error of their ways. I doubt it though, as they seem to have no idea about the reality of what we are facing.

    Unsuitable or offensive? Report this comment

  • Using the BREXIT vote is a cheap shot. The pound was always going to go down anyway as it was overvalued and much of what has happened was going to happen regardless of the result.

    Higher prices are no big deal. Its only a big deal if you don't pass the prices on and all quality stores that invest in their product, staff and infrastructure have nothing to fear.

    Consumers aren't going to walk round run the nude so we should all put our prices up and get on with it.

    Unsuitable or offensive? Report this comment

  • This is short term, expected, and documented before the referendum. 'In' voters will be thankful to the 'Out' voters in 5 years time.

    Unsuitable or offensive? Report this comment

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.