Devaluation of the pound.. what's going to happen

“I’ve seen petrol shoot up in price and we read about it in the news but what is going to happen to prices of the products we buy as a result of the devaluation of the pound?”
 
Anyone going on holiday this year?  Going to Europe or even America?  I’ll bet that you will be astonished at how little you will get for your pound compared to a couple of years ago.  A burger in America for $10.00 would have cost £5.88; today it would set you back around £8.33.  The same goes for craft supplies. 
 
If you bought something today for £10.00 and sold it for £24.00, what would you do if next time you had to pay £13.00 for it?  Reduce your mark-up from £14.00 to £11.00?  Pass on some of the increase in higher prices to your customers?  Pass on all of the increase and put your price up to £31.20?  That is the dilemma facing most companies who pay for their imports in US Dollars.  Everything they buy is now costing them 30% more which clearly they are not passing on in full.
 
It seems almost inevitable that prices will continue to rise in our industry.  Unless the pound suddenly recovers at least part of the losses it has suffered (and that is not likely until Brexit is all done and dusted), the pressures on costs and prices will not go away.  The importers/wholesalers have done a terrific job so far by passing on only part of the increases they are facing but if we want to see a thriving system of distribution, they have at least to cover their costs.  Frankly, the only way that the industry can keep consumer prices down is if everyone gives up a bit of their margin until things get better.  That means manufacturers (giving better dollar prices), wholesalers (not passing on the full impact of the exchange rate) and retailers (reducing their mark-up to reduce the final, consumer price). 
 
On the other hand, there is an argument for saying that we can be too timid when it comes to pricing.  Spending on craft supplies represents a great, low-cost investment for consumers compared to other leisure pursuits.  A modest increase is really not a lot of money.  How much does it cost these days to go to the cinema?  Perhaps we need to explain better to the consumers just what a good deal crafting is!  

Graeme Wright is Managing Director at EQS, Advisor Council Member at Quilt Inc USA, Board Member at CHA-UK and a regular contributor at Craft Focus Magazine. The article above was published at issue 60 from Craft Focus.,