Lockdown price hikes
One year on from the first lockdown, and once again we’re looking at changes to what we’re buying, and some price implications.
UK Price Spy has reported on a number of price spikes as a result of increased demand.
Examples include webcams which have seen a 2065% increase in interest and a £18 price increase. Hone fitness equipment has seen a similar surge, kettlebells showing the highest figures of 2573% increase in demand and a cost increase of £7.
Cookware has seen an increase in demand of over 500% with price increases on breadmakers of £32 and pizza ovens of £67. Demand for hair trimmers has increased by 260% and prices by £8.
Many product sales reduced dramatically during lockdown including suitcases and bags (down 81%), false eyelashes (79%), irons and steamers (56%), sun cream (50%) and washing machines (41%).
There may be an element of supply and demand, of automatic price changes through computer algorithms or of (to be polite) making hay while the sun shines.
On top of this are further price raises as a result of Brexit red tape and disruption of supply chains, exemplified by the blockage of the suez canal last week, which will in itself lead to some price increases.
Netflix increased its prices by up to £24during the lockdown (except to its basic package).
Other increases to households costs are coming in April. Ofgem has raised the cap on the cost of energy supplies and all the major energy suppliers will be increasing their prices, costing UK households around £1bn. This comes at the same time as increases in the costs of Council Tax, TV licenses, prescriptions, with broadband and mobile phone providers also increasing prices.
As Money Week reports “inflation is everywhere, except where we measure it”.
Will High Street prices rise after lockdown? Not necessarily, and it may vary between sectors. There are many retailers that have items that have been in stock for over a year and they will want to change them into cash quickly, and there will be price competition from retailers selling bankruptcy stock.
It is also likely that customers may continue to regard non essential shopping as non essential. Nevertheless, the £50bn spending spree by people who saved money during lockdown which we reported on last week, is still likely to take place when stores reopen.
Save the Street are calling for a “shop out to help out” scheme to operate from Monday to Wednesdays to boost High Street businesses.
There are many people desperate to take holidays. The algorithms used by the major hotel chains seem certain to cause an increase in prices to popular holiday destinations, and small hotels selling through specialist websites are also able to change prices quickly to maximise their income.
While leisure travel within the UK is expected to boom, business travel is likely to increase more slowly, so consider breaks to places that would normally be centres for business travel.
The same will be true when international leisure travel resumes. Destinations that are popular with tourists and that attract VFR (visiting friends and relatives) traffic could see price increases, business centres less so.
.Cytoplan UK are offering up to 40% off vitamin D until April 15th