Analysis of 400,000 price movements by electrical comparison website Kagoo between July and October 2016 has shown that retailers have started to raise prices of an increasing number of electrical products as the impact of the weakening pound starts to be passed on to consumers.
Thousands of electrical products have gone up in price in the last four months since the Brexit referendum result on June 23. During this time, the proportion of price increases doubled from 16.5% in June to 31.6% four months later, indicating that retailers are being forced to adjust their prices upwards.
Significant price increases were observed in TVs, PC monitors, home appliances and hand held consumer gadgets, Kagoo revealed. Over 1,000 PC monitors increased in price between July and October 2016, while TV retailers that decided to increase their prices did so by an average of £88.80 (11.9%).
Apple began increasing prices across most of its product range in early September. The price of the iPhone 7 Plus 256GB was increased by £100 from £819 to £919 and the iPad Pro 32GB was increased by £50 from £499 to £549. In total, 55 Apple products increased in price by an average of 7.5% since Brexit.
The average price increase observed between July and October was 8%, but the pound has fallen by 18% against the US dollar over the same period, indicating that retail prices do not yet reflect the full effect of the weaker exchange rate, Kagoo notes. Many larger retailers hedged their currency risk prior to the June referendum, and combined with pre-ordered stock, this has allowed them to delay passing on the full cost to consumers. While this has kept prices low in the short term, it is expected that retailers will soon be forced to increase prices further.
Kagoo co-founder Matthew Wilson commented: “We are starting to see the falling pound affecting the cost of high street electricals with thousands of popular items now more expensive than four months ago. With more price increases on the horizon it might be better to make larger purchases now before retailers are forced to pass on the full impact of their higher import costs.”