With many businesses, to include retailers, dealing with a “tsunami of cost of increases”, the British Independent Retailers Association (Bira), which counts gift and homewares stockists among its members, has highlighted that the increases in retail prices below the overall inflation rate are evidence that margins are being reduced.
Inflation, currently at a 40 year high of 9.4% – which was at 2.5% in June 2021 – is expected to peak at above 11% when energy bills rise again in the Autumn. Figures from the Office for National Statistics (ONS) have showed the government’s consumer prices index, which measures the price of living, was up from May’s 9.1% figure.
“Since last summer we have been warning of double-digit supply chain inflation that would result in higher prices,” comments Andrew Goodacre, ceo of Bira. “However, retailers are doing all they can to limit the price increases as they recognise that shoppers have less money to spend.” He continues: “These latest increases will, we worry, further damage consumer confidence and reduce expenditure. Furthermore, we are concerned about the rising cost of debt payments as a result of interest rate rises, as many more independent retailers have increased levels of debt due to Covid.”
Concludes Andrew: “we feel that government needs to review the options for paying back the bounce back loans and offer more flexibility to the businesses dealing with a tsunami of cost increases.”
Top: Retailer’s margins are being squeezed as not rising costs are passed on to consumers.
