Buyers forced to pay price of inflation
May 16 2008 By Evening Gazette
SPIRALING costs are forcing Tees manufacturers and retailers to put the squeeze on consumers, as official figures showed UK factory gate prices and producers’ costs rising at a record pace.
The Office for National Statistics said prices are at their highest since records began in 1986, with output prices for sales of manufactured products rising by 7.5% and input prices increasing by 23.3%.
And to maintain margins, Tees retailers are having to pass on rising raw material costs to the end customer.
Mohammed Hanif, owner of Charles Mini-Market in Middlesbrough, said increased supplier costs were taking their toll on his business.
He said: “I let supermarkets set the benchmark by waiting until they increase their prices before I increase mine. There is little that the government or Bank of England can do because rising food prices are a global problem.”
Nigel Rogers, chief executive of Hartlepool-based Stadium Group, said the impact of commodity and oil prices had caused inflation in the manufacturing pipeline.
He said: “Throughout the latter part of last year and earlier part of this we have had to adjust prices with most of our customers. It’s right to be concerned about inflation. Customers understand, but that doesn’t mean there isn’t resistance”.
Tony Sarginson, new regional policy executive at manufacturers’ organisation EEF Northern said rising commodities were putting pressure on companies to increase pay awards. “If food and fuel prices are going up, employees will have less money in their pocket at the end of the month”, he said.
The CBI has voiced concern over high energy and raw material prices faced by small and medium-sized firms.
But Fred Jones, founder and chairman of F Jones Cleveland in Middlesbrough, believes companies can introduce cost-efficiency measures so that they don’t have to pass on price rises.
