UK retailers are pressing the Government to reduce expenses as concerns mount over potential price hikes in stores because of the conflict in Iran.
The British Retail Consortium (BRC) has highlighted that businesses are already absorbing increased energy and shipping costs, which are expected to impact consumer prices soon.
Representing more than 200 major retailers, the BRC has appealed to the Government for assistance in alleviating the burden of higher National Insurance, packaging charges, new regulations, and business energy expenses.
The consortium stated that businesses have faced an additional £6.5 billion in costs. A survey conducted by the BRC revealed that 73% of respondents anticipate non-food product prices to rise due to tensions in the Middle East.
Moreover, 81% of individuals express concerns about energy bills, 76% about petrol and diesel costs, and 68% about potential tax hikes.
Meanwhile, the Food and Drink Federation (FDF), representing 12,000 food and drink manufacturers, has cautioned that food inflation could surge to 9% by the end of 2026. Businesses have also informed the Bank of England that UK food inflation might reach 7%.
BRC’s chief executive, Helen Dickinson, emphasized the impact of the Middle East conflict on supply chain costs, urging the Government to address domestic policy decisions that contribute to cost pressures on retailers.
Rachel Reeves recently met with Tesco, Sainsbury’s, and other major supermarkets to discuss the implications of the Iran conflict on consumers. In a recent update, the Chancellor announced plans to suspend tariffs on selected food and beverages to assist consumers in saving money at supermarkets.
A Government spokesperson reassured the public, stating, “We are taking measures to shield individuals from potential food price hikes. We have already suspended certain food tariffs and are collaborating closely with the sector to keep household expenses in check.”