Brexit: Fortnum & Mason says ‘no avoiding’ price rises in 2017 – as it announces bumper profits

The upmarket department store sources many products from the UK but says ingredients are imported so will be hit by weak pound

Ben Chapman@b_c_chapman
Monday 05 December 2016 17:31
comments
The department store has been in business since 1707
The department store has been in business since 1707

Even Fortnum & Mason, the Queen’s grocer, is not immune to the effects of the collapse in the pound. The upmarket retailer said rising costs associated with the currency’s fall would inevitably lead to price inflation in 2017.

“Retailers are nervous about the role of inflation, it definitely poses a threat and absolutely, prices will rise next year, there’s no avoiding it. We won’t be alone,” chief executive Ewan Venters said.

“Although our suppliers might be UK based, when you look at the ingredients mix, the packaging mix, it’s sourced from all over the world, so we can’t get away from currency movements. Of course, we’ll try and mitigate against that,” he said.

However, Fortnum’s has not yet been hurt by the exchange rate move; it announced a 27 per cent surge in profits on Monday.

Full-year results saw profits up to £6.2m on sales of £98.7m, helped by growth in online sales.

Mr Venters also pointed out that the weaker pound would present opportunities, including increased tourism to the UK and the possibility to export more.

He said this, combined with the firm’s international operations, will mitigate a potential downturn in the UK business.

“Uncertainty makes our job more challenging, but then consumers look for better value, a great product and reassurance when they spend,” he said.

“Current trading, post the Brexit vote, continues to be strong.”

Fortnum & Mason will also continue to explore international opportunities, with Mr Venters saying Donald Trump’s election victory in the US will not stop the firm scoping out a potential New York outlet.

Many British companies are feeling the effects of post-referendum currency movements, which have seen the pound lose almost a fifth of its value against the dollar, making imports significantly more costly.

Join our new commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

View comments