UK retailers are calling on the Government to reduce expenses to avoid potential price hikes in stores caused by the ongoing Iran conflict. The British Retail Consortium (BRC) highlighted that businesses are already dealing with increased energy and shipping costs, which will eventually impact consumer prices. The BRC, representing over 200 major retailers, emphasized the need for government intervention to alleviate pressures stemming from higher National Insurance, packaging charges, regulatory changes, and business energy expenses.
According to the BRC, businesses have faced an additional £6.5 billion in costs. A BRC survey revealed that 73% of respondents anticipate non-food products to become more expensive due to the Middle East tensions. Moreover, 81% expressed concerns about rising energy bills, while 76% and 68% were worried about petrol prices and tax hikes, respectively.
The Food and Drink Federation (FDF), representing 12,000 food and drink manufacturers, cautioned that food inflation could surge to 9% by the end of 2026. Additionally, UK food inflation reaching 7% was also reported to the Bank of England by businesses.
Helen Dickinson, the BRC chief executive, emphasized that the Middle East conflict is driving up supply chain costs, prompting valid worries among families. She stressed that not all cost pressures on retailers originate from global events, as domestic policies such as higher National Insurance, packaging fees, regulations, and energy expenses also play a significant role. Dickinson urged the government to take action to help retailers maintain affordable prices for consumers.
Retailers are facing challenges in controlling prices, and Dickinson emphasized the need for government support. She pointed out that other countries like Germany have taken steps to reduce business electricity costs, and UK policymakers should follow suit rather than using global instability as an excuse for inaction.
Rachel Reeves recently met with Tesco, Sainsbury’s, and other major supermarkets to discuss the repercussions of the Iran conflict on consumers. In a recent update, the Chancellor announced plans to suspend tariffs on certain food and drink items to assist consumers in saving money at supermarkets.
A Government spokesperson assured that measures are in place to shield consumers from potential food price increases. The suspension of specific food tariffs and ongoing collaboration with the sector aim to mitigate household expenses.