IE
There’s been lots of talk in the market about the price rises and surcharges triggered by the fall in the value of the pound after the Brexit vote. I’ve already written to customers about the currency band surcharges we’re having to impose from January and setting out exactly what proportion of the extra costs we’re absorbing and what proportion we’re reluctantly having to pass on.
Mila simply can’t afford to absorb all of these costs, which are totally beyond our control, and in some cases add up to 20%. We’re being completely transparent with customers about how much of the rise we are absorbing, but we can’t take the whole amount and still operate successfully, and nor would we expect our customers to. I think there needs to be a much greater level of acceptance in the market of the need to share the burden and crucially pass on higher prices to consumers.
Fundamentally, there will have to be a change in mindset about expecting consumers to pay more for their windows and doors because what isn’t even being talked about yet is the rise which is also already happening in commodity prices. This could easily have an even bigger impact on customers than Brexit.
I’ve written a piece for Windows Active magazine in January describing it as something of a perfect storm for manufacturers, and I genuinely believe it could have wide implications for the whole market.
Just to give you an idea – the monthly price of zinc hit an 8-year high in December, aluminium is already at a 4-year high and copper spiked by 20% in a single month.
I checked the Office Of National Statistics’ UK Producers Price Inflation Index yesterday for the year to November and metal prices into the UK were 35.33% higher than the year before. That’s a huge rise and obviously affects not only hardware manufacturers but aluminium systems, reinforcement, machinery etc.
We’re already being notified of metal price rises from our suppliers in the Far East for orders which will be delivered next Spring. I’m concerned that this will be the picture for much of 2017 and obviously not just for Mila but for the whole industry.
The reality is that higher prices may have to be the new norm and, while it will affect virtually all of us, no one is really talking about that yet. I don’t want to be the voice of doom but, in true Mila style, I am trying to be honest and above all fair. I’ll keep you updated via the blog.
Richard
