UK retailers are calling on the Government to reduce expenses as concerns grow over potential price hikes in stores due to the conflict in Iran.
The British Retail Consortium (BRC) highlighted that businesses are currently absorbing increased energy and shipping costs, which are expected to impact consumer prices in the near future.
Representing more than 200 major retailers, the BRC has urged the Government to alleviate pressure from rising National Insurance contributions, packaging fees, new rules, and business energy expenses.
The consortium revealed that businesses have already faced an additional £6.5 billion in costs, with a survey indicating that 73% of respondents anticipate non-food product prices to rise due to the Middle East tensions.
Furthermore, 81% of individuals expressed concerns about energy bills, 76% about fuel costs, and 68% about potential tax hikes.
In a separate statement, the Food and Drink Federation (FDF), representing 12,000 manufacturers in the sector, cautioned that food inflation could potentially reach 9% by the end of 2026, with UK food inflation forecasted to hit 7%.
Helen Dickinson, the BRC’s chief executive, emphasized the impact of the Middle East conflict on supply chain costs and stressed the need for government intervention to support retailers in maintaining affordable prices for consumers.
Dickinson pointed out that while global instability plays a role, domestic policy decisions such as increased national insurance contributions, packaging charges, regulations, and energy expenses also contribute to cost pressures on retailers.
She highlighted actions taken by other countries, such as Germany reducing electricity costs for businesses, and urged the UK to follow suit to address rising costs.
In response to industry concerns, Rachel Reeves met with Tesco, Sainsbury’s, and other major supermarkets to address the fallout of the Iran conflict on consumers.
Last week, the Chancellor announced plans to suspend tariffs on selected food and beverages to aid consumers in saving money while shopping in supermarkets.
A Government spokesperson assured that measures are being implemented to shield consumers from potential food price hikes, including the suspension of certain tariffs and ongoing collaboration with the retail sector to manage household expenses.
