European retailers caution that a prolonged Middle East crisis could trigger price increases and weaken consumer demand across sectors, from fashion to grocery chains.
The warning reflects growing concern as energy costs rise sharply, pushing crude prices above $100 per barrel and increasing transportation and supply chain expenses.
H&M CEO Daniel Erver said sustained high energy costs would intensify inflationary pressure, affecting already strained consumers and complicating retail recovery.
Despite softer March sales, H&M highlighted its flexible supply chain, allowing it to adjust operations and mitigate potential disruptions.
UK retailer Next signaled possible price hikes by mid-year, estimating £15 million in additional costs tied to fuel, freight, and logistics pressures.
CEO Simon Wolfson indicated initial increases could remain modest, around 1% to 2%, but warned they may rise significantly if cost pressures persist.
Poland’s LPP reported strong recent performance but noted rising fuel and distribution expenses could weigh on profitability in the coming months.
Consumer sentiment across Europe remains fragile, with declining retail sales and confidence levels signaling caution as households brace for higher living costs.
