Marks & Spencer clothes and food is set to become more expensive as the retailer battles increased energy costs, intensified by the war in Ukraine.
Chairman Archie Norman said: “We were already seeing pre-Ukraine some big increase in food prices coming through, and in textiles as well, and now this is going to add pressure again.
“An increase in cost, animal feed, grain, sunflower, will have an impact, but it’s not that big. The big thing is the cost of energy.”
Prices rose by 5.5pc on average in the year to January, while the Bank of England warned last week that inflation could hit 8pc or higher in the coming months. Millions of households are facing a huge squeeze on their finances, with the energy price cap rise in April set to add hundreds of pounds to bills.
“We’re partially hedged on energy costs but when you look through, if energy costs are going to be at this level next year, that’s a lot of money. It’s the same for all retailers,” added Mr Norman, as he cautioned over a wage-price spiral.
“Freight costs, container costs, some of this will work through. The question is whether the substantial increase in the cost-of-living, will that translate into huge pressure for substantial, continued wage increases?
“This year, we’ve given everybody a pay rise, but we already have colleagues who are saying ‘that’s just gone in my energy bill’.”
M&S last month said it would raise its minimum pay for 40,000 staff to £10 an hour, and £11.25 in London, following similar moves from rival supermarkets as they compete for staff.
Mr Norman predicted, however, that the headline level of inflation would be on a downward trend by “September, October” as some of the costs normalise. “I wouldn’t yet conclude we’re in a world where inflation is permanently with us.”
His remarks came after John Lewis chair Dame Sharon White said last week that inflation would remain “more enduring than any of us expected”.
