The retail prices in the UK were on a constant downhill trajectory or they have been stagnant for the past 63 months. This is a trend that seemed to be absolutely persistent, but it finally came to its end!
According to the British Retail Consortium, the retail prices are marking some growth lately. It is mostly seen in the food sector, due to the weather conditions this year and the projected shortages of certain products, but the similar trends could be translated into non-food related branches of the retail as well.
The fulfilment issue and BREXIT
Although the fulfilment costs have been on the rise lately, retailers seem to be quite resilient when it comes to increasing prices. This is by all means great news from the shopper’s perspective, but it is definitely not something sustainable unless the BREXIT happens with a deal made to save UK retailers.
Simply said, if the breakup with the EU happens without any deal reached, which is definitely a possibility – the fulfilment costs will mark such an increase that the prices will have to go up, one way or another.
The real danger lies in the words of the Prime Minister who openly said that no deal is better than a bad one. It might result in a rather violent split between the UK and the EU in financial terms. Whether the UK economy has the power and the reserves to enter such a race with the entire continent is yet to be seen, but it would definitely change both demographic structure of the shoppers who use UK outlets, and the shopping habits of the majority of shoppers. Needless to say, there would be no free cross-border trade with the EU members if there is no deal.
The consequences of such development are hard to predict. One thing is certain though – dynamic times are ahead.
Submitted by Studioworx Marketing Team on 11/09/2018