The summer months might have been kind to the high street as tourists took advantage of the weaker pound, but much closer to home currency turbulence is causing consternation among those wearing an equipment ‘buying’ hat.
A huge volume of the stainless steel kitchen hardware that comes into the UK market is produced by US and European companies, and that means there was always going to be implications for the industry once the pound started plummeting.
While some manufacturers have made a point of claiming they have not had to raise prices, it bears the question of just how long they can hold out. In an ideal world, nobody wants to pass costs onto the customer, but sometimes it simply isn’t possible — or financially feasible — to absorb the pain. In that scenario, something has to give.
One company that has faced the issue head on is Hobart, and while news that it has raised prices by up to 8% in the wake of Brexit and the resultant net devaluation of sterling won’t exactly send customers jumping for joy, it has at least had the honesty to address it early on and explain its reasoning.
Like a lot of brands, it regards the devaluation of the pound against the euro and the US dollar as having by far the greatest impact on trading. And, although exchange rates seem to have stabilised, it forecasts the net effect to be a devaluation of sterling by as much as 16%. This is not a figure to be sniffed at, especially when it is reliant on the purchase of machines, spare parts and raw materials in more than one currency.
Hobart’s argument is that if it wants to maintain the levels of excellence that it has built through years of boom and bust, and which are reflected in terms of equipment quality, R&D investment and after-sales service provision, it has no choice but to take this course of action.
Others are making similar noises and while they might be holding fire on announcing their decisions for the time being, the start of a new year — when manufacturers traditionally adjust list prices — is not that far away.
Watch what happens then.