James Davey and Paul Sandle

LONDON (Reuters – On Thursday, three leading British retailers spoke out about the inflation threat that they are facing this year. They were urged by their managers to be competitive because rising prices could threaten customers’ spending power.

Next, Britain’s top-grossing clothing retailer, indicated that higher freight and manufacturing cost would push prices up by 6% over the second half (2022), raising questions about customers’ ability to pay for this. In April, the Bank of England anticipates that overall consumer price inflation will be at its highest point since 1992. It is expected to then ease.

Simon Wolfson, next boss, told Reuters that the gap in general wage and market prices would greatly impact the company’s future prospects for 2022.

He stated that “the positive for retail” is the ability to alter pricing. He said that wage inflation will not be as bad if it follows price increases. However, if it does it won’t cause as many problems as it would if it was.

Greggs, which sells food-to go, stated its rising costs are due to government mandated hikes in the minimum wage as well as the increase in ingredients prices. The company has visibility over the next four- to six month with order contracts.

Roger Whiteside, outgoing CEO of Reuters stated that this year was more difficult than others because inflation is coming at us from both the labor side and the ingredient side.

Greggs would do everything possible to reduce prices, but they had to compete with other groups.

B&M, a discount retailer that has performed strongly during the pandemic, upgraded its profit forecast on Thursday. It did however temper its optimism by acknowledging that the 2022 year will bring more disruption to supply chains, inflationary pressures, and uncertainty from COVID-19.

The global economy is facing rising inflation. This can be caused by supply chain disruptions, high energy prices, and an increase in labour costs. Also, a revival of goods demand after the lockdown pushes prices up to levels never seen before.

After years of stagnant real wage growth, this will put additional pressure on consumers spending. British consumers may see an increase in energy and taxes costs starting in April.

A rise in food prices is also a problem for them. According to data from the industry, December saw grocery price inflation of 3.5%, which is its highest level since spring 2020. This added nearly 15 pounds ($20), to consumers’ monthly grocery bill.

($1 = 0.7392 pounds)