Retailers Brace for Price Jolts

Beginning in fall 2011, retail prices are predicted to jump an additional 10-15% or higher than they currently are set.

During the recession companies were forced to offer a better value for their products but with sudden surge in the economy, companies are dramatically increasing their merchandise prices, which will negatively impact consumers.

“This is the first time in a decade or more that we are seeing some inflation that is quite high,” Glenn Murphy, Gap Inc. chairman and chief executive officer stated.

This escalating issue will be more prominent towards mass and mid-tier retailers like Wal-Mart Stores Inc., Target Corp., Kohl’s Corp., J.C. Penney Company Inc. and The TJX Companies, Inc.

“You will see some price increases, but you will see it affecting the lower-end basics and commodities, such as underwear, a lot more than the luxury, designer end,” Saks Inc. chairman and CEO Steve Sadove said.

This rise in price of raw materials has a lot to do with this issue.

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