Carpetright warns of new year price hike
Wednesday 15 December 2010
Carpetright, the UK's biggest floor covering specialist, has warned that soaring raw material costs will drive carpet prices up by as much as 7 per cent over the coming months.
Lord Harris of Peckham also warned of a "difficult" year for retailers in 2011, as the 702-store chain posted a 28 per cent fall in half-year underlying profits to £10m. "Everyone has got inflation going on – I think that carpets will be 6 to 7 per cent dearer in February, March and April," the chairman of Carpetright said. "That will not be because of VAT – it will be because of theincrease in raw materials." Lord Harris added that the price of polypropylene – the raw material for the 70 per cent of UK carpets that are man-made – has shot up to nearly £1,200 per ton from £740 per ton last year.
Carpetright will kick off its sale on Boxing Day and Lord Harris expects "strong" sales ahead of VAT rising to 20 per cent on 4 January, but he said there had been little sign of consumers bringing forward purchases so far.
For the 26 weeks to 30 October, the retailer suffered a 2.7 per cent fall in revenues to £207.6m in the UK and Ireland, while on a like-for-like basis, sales tumbled by 6.1 per cent.
On consumer spending in 2011, Lord Harris said: "I think it is going to be a difficult year – the housing market is not going to be great and we have got public spending cuts." Total sales at Carpetright – which has 584 stores in the UK and Ireland, and 118 on the Continent – fell by 4 per cent to £248m.
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