Has the weak £ forced you to raise prices?
Analysis of 400,000 price movements by electrical comparison website Kagoo between July and October 2016 has shown that retailers have started to raise the prices of an increasing number of products as the impact of the weakening pound starts to be passed on to consumers.
Thousands of electrical products have gone up in price in the last four months since the Brexit referendum result on 23 June. During this time, the proportion of price increases doubled from 16.5% in June to 31.6% four months later, indicating that retailers are forced to adjust their prices upwards.
PC monitors and TVs both saw significant increases
Significant price increases were observed in TVs, PC Monitors, home appliances and hand held consumer gadgets. Over 1,000 PC monitors increased in price between July and October 2016 whilst TV retailers that decided to increase their prices did so by an average of £88.80 (11.9%).
Apple was one of the first companies to up prices
Apple began increasing prices across most of its product range in early September. The price of the iPhone 7 Plus 256GB was increased by £100 from £819 to £919 and the iPad Pro 32GB was increased by £50 from £499 to £549. In total, 55 Apple products increased in price by an average of 7.5% since Brexit.
Further price increases expected
The average price increase observed between July and October was 8%, but the Pound has fallen by a staggering 18% against the US Dollar over the same period, indicating that retail prices do not yet reflect the full effect of the weaker exchange rate. Many larger retailers hedged their currency risk prior to the June referendum, and combined with pre-ordered stock, this has allowed them to delay passing on the full cost to consumers. While this has kept prices low in the short term, it is expected that retailers will soon be forced to increase prices further.
Are you raising your prices?
Have you had to change your prices yet? If you are sourcing products from outside the UK it’s likely that your next shipment of stock will cost more than six months ago. Even if you’re sourcing from within the UK, watch out for price increases as wholesalers and manufacturers see increased product and material costs when they import fresh stock.