A recent survey has revealed that 67 per cent of retail chairmen believe passing rising costs onto consumers was unavoidable in the coming year.
In Korn Ferry‘s 2017 UK Retail Chairmen Survey over two thirds of those surveyed, including Debenhams‘ Sir Ian Cheshire and Ocado‘s Lord Rose, said hiking up their prices was part of their strategies this year.
This morning Karen Millen was the latest retailer to announce coming price hikes of five per cent, following Mothercare‘s announcement of the same upcoming uptick in prices just last month.
In the annual survey, which features 49 leading retail chairmen with a combined revenue of £265 billion, a further 61 per cent of retailers stated that reducing overhead costs was also top of their post-Brexit agendas.
Aside from increasing cost pressures brought on by the referendum vote, 80 per cent of those surveyed predicted a fall in consumer spend over the next 12 months, and 40 per cent admitted to being pessimistic about the year ahead.
“The general election is front of mind for retailers,” managing director of Korn Ferry Sarah Lim said.
“The majority expect a Tory win but also hope for a clear result – one that will put domestic divisions to bed and pave the way for smoother Brexit negotiations.
“Fundamentally though, it is Brexit and its multiple implications that remain the biggest challenge.
“Last year 88% of chairmen anticipated that leaving the EU would have a damaging effect on the economy. There‘s a prevailing sense of uncertainty now Article 50 has been triggered.”
Meanwhile over half the retailers surveyed stated they would invest more outside of the UK than inside over the next year, prioritising overseas investment until some stability is restored to the UK economy.
Lim added: “Many retailers are gearing up to invest outside the UK to find new growth opportunities.
“They‘re also continuing to invest heavily in digital, own-label development and product innovation – critical for driving growth and exploiting international markets.
“This is a notable shift from last year, and has been clearly accelerated as a result of Brexit.”
Over 90 per cent of those surveyed were white males, which Korn Ferry states reflects the imbalances in the boardrooms of UK retail. Only 54 per cent of those interviewed admitted that ethnic diversity in the boardroom was on their agenda.