But this problem has been exacerbated by Britain's decision to leave the EU, which has prompted a prolonged devaluation in the pound, particularly against the US dollar. This is irritating for retailers who source stock overseas and predominantly in dollars, before selling items domestically in sterling. In short, it's suddenly become much more expensive for them to buy and less lucrative to sell. What's more, with deflation and competition intensifying in the UK retail market, it's difficult for sales to accelerate at a pace sufficient to offset the shortfall.
This has been particularly hard for those with a domestic customer bias, like Next. It naturally faces higher costs compared to its online competitors thanks to maintenance of a property estate and in-store sales forces, merchandising and marketing expenses too. Online pure-plays like Boohoo, by comparison, have far less on their plate. The biggest difference is that online companies can reach multiple geographic territories either via custom websites or simple extensions of their own. In this way, a company like Boohoo earns a more significant proportion of its revenue in dollars, which minimises the damage caused by foreign exchange rates.
It's true, the average shopper heading to the high street this weekend won't notice that the winter coat they buy costs £50. It was £50 yesterday and it will be tomorrow too. For now, it seems the companies selling this coat are the ones paying the price. But mark my words, should the sterling rout continue, we're going to end up forking out more to cover the cost.
