09 March 2017 by lberuti
British grocers have started raising prices on some products as sterling’s drop leads to increased costs for imported goods. MRWLN (Wm. Morrisson Supermarkets Plc) and Waitrose said unwavering competition means they cannot cover all the costs of the pound’s Brexit induced fall through price increases. The CEO of MRWLN said on a call with reporters today that he is “seeing more price increase coming through to be discussed. Some we try to hold off and some we try to reduce, but the industry can’t defy gravity”. The pressure on expenses has already prompted clashes between grocers and suppliers, including a dispute between UNANA ( Unilver N.V. ) and TSCOLN ( Tesco Plc ) over the price of Marmite. Investors understandably started to worry about the effect of higher costs on margins. They put an end to the UK grocers’ impressive run since the beginning of the year and made them the underperformers of the Consumers Non-Cyclical sector. MRWLN closed 4bps wider at 53bps, TSCOLN 4bps wider at 171bps, and MKS ( Marks and Spencer Group Plc ) 1bp wider at 145bps.