Fortnum & Mason blames price rise on weak pound as it announces 27% rise in profits
The boss of the iconic British retailer has said that the weakness in the pound means that there is "no avoiding" increases.
Monday 5 December 2016 11:57, UK
Fortnum & Mason is set to increase their prices in 2017 as a result of the fall in the value of sterling.
As the upmarket British retailer released full-year results showing a 27% rise in profits, Ewan Venters said the rising costs associated with currency fluctuations meant that price inflation was inevitable.
Many British companies are feeling the effects of the weakness in the pound, which has lost almost a fifth of its value against the dollar since June's Brexit referendum.
Due to the decline, importing from abroad has become significantly more costly, meaning that any firms which source products, ingredients or parts from overseas are pushing prices up to compensate.
"Retailers are nervous about the role of inflation, it definitely poses a threat and absolutely, prices will rise next year, there's no avoiding it. We won't be alone," said Mr Venters.
"Although our suppliers might be UK based, when you look at the ingredients mix, the packaging mix, it's sourced from all over the world, so we can't get away from currency movements.
"Of course, we'll try and mitigate against that."
The retailer is the latest in a line of companies that have warned about rising prices.
Unilever, the manufacturer of thousands of products including Pot Noodle and Marmite, clashed with supermarket Tesco earlier this year when it attempted to raise wholesale prices by 10%.
However, Mr Venters also acknowledged that the currency weakness will afford new opportunities for his company, including an increase in tourism, bringing new customers and a greater focus on exports.
He said this. along with the firm's existing international operations, should allow Fortnum & Mason to offset any downturns in UK business.
"Uncertainty makes our job more challenging, but then consumers look for better value, a great product and reassurance when they spend," he said.
"Current trading, post the Brexit vote, continues to be strong."