economy
Retail firms warn of price hikes if Iran war extends for months
Fashion retailer Next has accounted for millions in additional costs likely to arise from the Middle East conflict
TL;DR
- Retailers are experiencing increased costs due to the Middle East conflict, particularly in fuel and air freight.
- Next has accounted for £15 million in additional costs, assuming the disruption lasts three months.
- If the conflict persists beyond three months, Next plans to pass on costs as higher prices.
- The war could increase inflation, disrupt supply chains, and reduce consumer demand for discretionary items.
- H&M noted potential for slightly additional cost pressure if geopolitical instability extends.
- Analysts suggest retailers with a high proportion of discretionary spending are more vulnerable.
- Next increased its pretax profit guidance, indicating resilience and an ability to pass on costs.
- H&M reported a decline in sales but beat profit expectations due to cost control.