The Entertainer founder and managing director Gary Grant has warned that retail prices will jump 10% next year following the Brexit vote.
Grant said the toy specialist is “looking at 10% plus retail price increases” following the UK’s decision to leave the European Union and the falling value of the pound.
He insisted, however, that consumers would not feel the impact of price inflation until 2017.
“We have bought enough dollars for this year, so it is not going to affect this Christmas, but there will be an impact on prices as we go into the New Year,” Grant told Retail Week.
He added that The Entertainer will keep inflation to an “absolute minimum” to ensure its customers are “impacted less”.
Grant insisted that prices would go up across the sector because “if any retailers’ cost prices go up, retail prices in shops will follow”.
He said: “Consumers will see the price of petrol go up. Even items bought from UK suppliers in pounds will go up because they will have been bought in dollars.”
Grant noted that price inflation could be “the saviour” of rising retailer costs, such as the national living wage, if it leads to an increase in turnover.
However, he said that was based on the assumption that “the customer has more money in their purse,” but warned: “We’re not going to see salaries increase 10% next year.”
Everything is on pause
Grant told Retail Week he thought the outcome of the EU referendum had come as “a surprise to everybody”.
He added that the full impact of the vote remains unknown because “everything else is yet to be negotiated”.
Grant said: “We have built a business model knowing what we know, and now we’ve changed it all.
”How can we plan over the next one to five years to build and grow a business in Europe when we don’t know what it looks like? Everything is on pause.”
The toy specialist, founded by Grant in 1981, is celebrating its 35th year on the high street and posted its seventh consecutive year of sales growth in its last full-year.