Opinion

Tsunami of increases on the way

By Ed Bedington contact

- Last updated on GMT

How should operators respond to increased prices?

Related tags: Price increases, Government, Wages, Business rates, Vat rise

Our fearless leader, when he’s not on his hols in the middle of a major crisis, recently announced the wonderful news that his ambition for the UK was for it to become a high wage economy.

For my money, there’s been plenty of rather dubious to downright stupid ideas from this current motely crew of people playing at running the country, but this one certainly ranks up there as one of the more dubious.

Boris appears to be suggesting the wrong solution for a different problem. To me, high wages simply leads to higher prices, and the way the market appears to moving right now, higher prices are already on the cards. So perhaps Boris isn’t so daft by talking about higher wages - people will soon be demanding them to be able to afford to eat as the Brexit effect continues to bite, along with the Covid effect etc.

But Boris is playing for the popular vote with statements like that, and let’s be fair, it’s a tried and trusted route for him, who cares whether it happens to be the truth or not.

But price rises are rapidly becoming a major reality for operators that are already facing increases on a number of fronts, from the rise in the National Living Wage, through to the increases in VAT and the threat of a return to the full horror that is Business Rates.

Rises across the board

Product price increases are being threatened across the board, with Matthew Clark and Bibendum recently announcing a hike, following on the heels of food producers that are struggling with supply, production and escalating energy costs.

Oh, yes, and energy costs are going up.

We’ve talked a lot about perfect storms hitting our industry of late, and this is yet another example. We’re facing a tsunami of increases on the horizon and it’s going to be a real challenge for all.

Pass them on, and see that returning customer demand start to drop off, or absorb them and erode your margins and see your business slowly collapse from internal cost bleeding.

There’s no escaping the fact prices are going to increase, so it’s probably best to be open and honest with your customers. This is the reality of post-Brexit Britain - we’ve got to learn to live with it.

Related topics: Legislation

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