The retail sector organization has warned that consumers may be slapped with even higher rates when the energy bill support program for businesses expires in April.
Shop owners have been attempting to avoid passing through record price increases to customers, but they may be at a loss for options since costs to expected to climb in the absence of more assistance, it said.
Between October and March, the government set wholesale pricing for energy and gas for businesses.
Consumers and businesses can anticipate this year to be challenging as “inflation shows no immediate indications of lessening,” according to Helen Dickinson, chief executive of the British Retail Consortium (BRC).
Every month, the BRC examines how much the prices of 500 commonplace items have changed.
According to its most recent study, food inflation increased to 13.3% in December from 12.4% in November.
The rate of food inflation is currently at an all-time high. The BRC to cause by the high price of electricity, fertilizer, and animal feed as a result of the conflict in Ukraine.
As stores gave steep discounts to move inventory, prices for non-food items decreased, claim it.
According to Ms. Dickson, retailers will continue to push hard to assist their clients and maintain affordable rates.
However, she warned that retailers might face a combined bill increase of £7.5 billion without the government’s energy support program.
She said that consumers might pay the price if the government doesn’t immediately clarify what future help might entail.
The British Chambers of Commerce, the CBI, the Federation of Small Businesses (FSB), and UK Hospitality are all anticipated to attend a meeting with the chancellor on Wednesday.
Small businesses “cannot plan their 2023 without certainty,” according to the FSB.
Mike Watkins, director of retailer and business insight at NielsenIQ, claims consumers will have less money to spend on non-essential things in January due to rising food and energy prices and the receipt of holiday spending bills.
The industry was “facing a sharp cliff-edge in April,” according to UK Hospitality. The extension of this support was therefore “important.”
The managing director of Voodoo Doll, which operates five cocktail bars called Mojo in the north of England, is Martin Greenhow.
Both his fixed-term energy contract for one of the bars and the energy bill assistance program, according to him, end in March.
Even with the government’s financial assistance, the rates at another of his locations more than doubled when the energy tariff was due for renewal last year.
We were looking at £17,000 a month, he said. ” Any business, however, cannot continue operating that way. I would be sitting on a yacht in Monaco instead of being here right now if we had those kinds of margins.”
Businesses needed to know whether such support for energy bills would last “months ago” and “for the long run,” he claimed.
According to a representative for the Treasury, the review’s goal is to lessen the public finances’ exposure to volatile global energy prices starting in April 2023.
Before the present program expires in March 2023, they announced, “We will release the results of this evaluation in the New Year to ensure firms have sufficient confidence about future support.”
A recent study revealed that in 2022, the number of UK stores closing sharply increased.
According to the Centre for Retail Research, more than 17,000 sites closed their doors, the largest amount in the previous five years (CRR). According to this, overall closures were about 50% more than in 2021.