Marks & Spencer clothing and food are set to become more expensive as the retailer battles rising energy costs, intensified by war in Ukraine.
Chairman Archie Norman said: “We were already seeing a big increase in food prices before Ukraine, as well as textiles, and now it will add further pressure.
“An increase in costs, in animal feed, in cereals, in sunflower, will have an impact, but it’s not that big. The big problem is the cost of energy. »
Prices rose 5.5% on average in the year to January, while the Bank of England last week warned that inflation could reach 8% or more in the coming months. Millions of households are facing huge pressure on their finances, with the energy price cap hike in April set to add hundreds of pounds to bills.
“We’re partially covered on energy costs, but when you look through it, if energy costs are going to be at this level next year, that’s a lot of money. It’s the same for all retailers,” Norman added, warning of a price-wage spiral.
“Freight costs, container costs, some of that will work. The question is, will the substantial increase in the cost of living translate into enormous pressure for substantial and continued wage increases?
“This year we’ve given everyone a pay rise, but we already have co-workers saying ‘it just disappeared in my energy bill’.”
Last month, M&S announced it would raise its minimum wage for 40,000 staff to £10 an hour and £11.25 in London, following similar moves by rival supermarkets as they battle over the staff.
Mr Norman, however, predicted that the overall level of inflation would be on a downward trend by “September, October” as some of the costs normalise. “I wouldn’t conclude yet that we are in a world where inflation is permanently with us.”
His remarks came after John Lewis chairman Dame Sharon White said last week that inflation would remain “more durable than we had expected”.
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This notice was published: 2022-03-20 16:29:59