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Trade News Archive 2009
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16th June 2009
Wholesale suppliers could be hit by inflation
The relatively weak state of sterling could see wholesale suppliers stocking products imported from overseas passing on an extra £20 billion in expenses to the UK's non-food retailers.
According to PricewaterhouseCoopers (PwC), struggling retailers may be forced to push this added cost onto their customers if they are to sustain their already diminished profit-margins.
The cost of imports for British wholesale distributors has increased significantly in recent months, with the value of the pound falling from $2 in May 2008 to $1.5 last month.
Similar drops against the euro have left prices inflated for goods coming into the UK from all over the world.
Mark Hudson, retail leader at PwC, said that consumers are already watching their spending as a result of the recession, a factor that could make further price rises disastrous for shops.
"But since retailers' margins are so tight, these extra costs will potentially spill over into the prices consumers are asked to pay," he added.
Meanwhile, retailers could do well to heed the advice of Business Link West Midlands, which suggested that diversifying and extending the range of goods on offer can help them to reach more customers at a time when spending is tight.
(c) 2009
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