Shop Owners Issue Serious Warning About Looming Price Rises
Retail leaders express deep concerns over rising costs and potential price hikes affecting consumers in the near future
Retail, Price Rises, UK, National Insurance, Inflation
London: A recent survey has revealed that many shop owners are worried about rising prices. About 67% of chief financial officers from the British Retail Consortium (BRC) said they’ll have to increase prices due to higher National Insurance Contributions starting in April.
It’s not looking good, with seven out of ten CFOs feeling pretty pessimistic about the next year. Only a small 13% are feeling optimistic. The main worries? Falling demand, inflation, and rising taxes.
The BRC also pointed out that nearly half of the CFOs plan to cut back on spending and some are even delaying new store openings. It’s a tough time, with 44% expecting profits to drop.
More than half of those surveyed said they’d reduce hours and overtime, while others might have to let some staff go. Automation is also on the rise as a way to cope with costs.
This survey comes after 81 retail leaders reached out to the Chancellor, warning that costs could soar by over £7 billion by 2025 due to changes in National Insurance and other factors.
They also predict that shop price inflation, which is currently negative, could hit an average of 2.2% by late 2025. Food inflation is expected to rise to about 4.2% later this year.
Chancellor Rachel Reeves is under pressure as these economic challenges unfold. BRC chief executive Helen Dickinson emphasized that retailers are facing tough choices about investment and pricing.
She noted that changes to National Insurance will hit retailers hard, especially since they employ millions of part-time and seasonal workers. Retailers have tried to keep prices down, but with slow growth and tight margins, consumers might have to shoulder some of the costs.
Unfortunately, this could mean fewer shops and jobs in local communities as retailers struggle to keep afloat.