Fashion retailers have called time on deflation and are set to hike prices by up to 8% for autumn as they contend with volatile currencies, higher commodity costs and the likelihood that VAT will rise.
Major high street retailers including Marks & Spencer, Next, Debenhams and Primark are said to be reviewing pricing strategies for autumn, with most thought to be pencilling in average rises of between 4% and 8% in the wake of increasing prices for cotton and Chinese labour.
One director of a large-scale high street multiple said: “Prices are definitely going up and it’s not just about VAT. It’s about ex-factory costs, and we are really uncomfortable with that, given the consumer will have less money to spend. “
Fashion trade sources said further price hikes were likely to come through by the spring season.