UK retailers are calling on the Government to reduce expenses to prevent potential price hikes in stores linked to the recent conflict involving Iran. The British Retail Consortium (BRC) has 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 requested government support to alleviate the burden of rising National Insurance contributions, packaging fees, regulatory requirements, and business energy expenses. The consortium pointed out that businesses have already incurred 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.
In a separate development, the Food and Drink Federation (FDF), representing 12,000 food and beverage manufacturers, has cautioned that food inflation could reach 9% by the end of 2026, with UK food inflation potentially hitting 7%, according to feedback provided to the Bank of England.
BRC’s chief executive, Helen Dickinson, emphasized the impact of the Middle East conflict on supply chain costs, expressing concern from families. Dickinson highlighted that while global factors contribute to cost pressures, domestic policies such as higher national insurance rates, packaging charges, regulatory changes, and energy expenses can be addressed by the government to help retailers maintain affordable prices for consumers.
Furthermore, discussions in Germany and the EU on reducing business electricity costs and responding to the crisis have been highlighted as examples for the UK to consider. Dickinson stressed the importance of government intervention to prevent additional costs from being passed on to consumers through price increases.
Recently, a meeting involving Rachel Reeves and major supermarkets like Tesco and Sainsbury’s discussed the implications of the Iran conflict on shoppers. Additionally, the Chancellor announced plans to suspend tariffs on selected food and beverages to aid consumers in saving money at supermarkets.
A Government spokesperson reassured the public by stating proactive steps to shield consumers from potential food price rises. The suspension of specific food tariffs and ongoing collaboration with the sector aim to mitigate the impact on household expenses.
