It was difficult for all of us to avoid the cost of living increase in recent months as the impacts are felt both at home and in the workplace.
Food and fuel prices have dominated recent headlines, with commodity prices such as oil recently skyrocketing and driving up many other associated costs in the process.
This also drives the price of other commodities. But why is this so, and what impact is felt on the different professions? We’ll take a look.
The cause of the price hike
There have been several incidents affecting the global process recently. Right here in the UK, the continued impact of Brexit has altered the prices paid at supermarket checkouts as supply chains struggle to keep up with new regulations.
The Russian invasion of Ukraine and the economic sanctions imposed on the aggressors have also changed things. With many countries now turning away from Russia for supplies of essentials like oil and gas, a growing shortage has driven prices to unprecedented levels.
The effects of rising prices
The most immediate impact of these price increases generally goes two ways. Increase in prices for consumers or decrease in returns and margins for businesses.
This is an especially difficult decision for small businesses, as going either way could result in lost revenue.
While some of the rising costs need to be passed on to customers, it’s important to have open and honest conversations about it. People are much less likely to be understanding and continue to trade with you if you suddenly impose a price hike on them.
Ways to reduce costs
It is difficult for companies to insulate themselves – and ultimately their customers – from these price increases.
Some trades can benefit from using products that replace certain materials but don’t skimp on quality. Roofers can use lead-free flashing alternativesfor example.
However, this commitment to quality must always remain a key objective. Indeed, consistently delivering high-quality service and end product while building a collection of strong, positive referrals will ensure you keep the business going.
Will the prices always remain so high?
Inflation is currently at record highs and could continue to rise through 2022.
However, it is expected that things will turn in the opposite direction in the coming years which could see a return to lower prices for raw materials and other related processes.
As we have already seen in the first few months of 2022 – and in fact over the past two years – it is almost impossible to predict how world events will shape these things.