Debenhams deputy chief executive Michael Sharp has forecast that prices will increase by 5 per cent as currency fluctuations continue.
The figure is higher than the 3 per cent hike forecast by Marks & Spencer executive chairman Sir Stuart Rose (Retail Week, last week).
Sharp said the increase will be determined by each retailer’s hedging policy. Debenhams hedges 70 per cent 18 months in advance.
“Once you take into account how much more value we can extract from the supply chain to offset currency changes, the only way to protect margins is by retail price inflation,” he said.
Sharp, who worked with Rose in the 1990s at Burton Group, has been linked to the chief executive’s role at Marks & Spencer. However, he told Retail Week he was “a Debenhams man”.
He also countered speculation he is being lined up as the successor to Debenhams chief executive Rob Templeman. “Rob has made it perfectly clear he is fully engaged and planning to stick around,” he said.
He added that in the current climate he would focus on the “battle for market share” and “not be apologetic for Debenhams’ strong promotional calendar”. He said the trading climate “suits our business” and what customers want.
Sharp believed talk of green shoots was “inappropriate” and that 2010 would be a “really challenging year”.