Europe Retailers Warn of Price Surge Amid Middle East conflict

European retailers are warning of rising prices and weakening consumer demand as the ongoing Middle East conflict drives up energy and transportation costs. Companies across the sector say prolonged disruption could fuel inflation, with oil prices already climbing above $100 per barrel and increasing pressure on global supply chains.

Major retailers including H&M and Next have signalled potential price increases in the coming months. While short-term hikes may remain modest, executives caution that prolonged conflict could push prices significantly higher, particularly as manufacturing and freight costs rise. Firms are relying on flexible supply chains to manage uncertainty but acknowledge growing risks.

At the same time, consumer confidence across Europe is weakening, with falling retail sales and declining sentiment in countries such as the UK, Germany, and Italy. Retailers like Co-op warn that households are becoming more cautious amid rising living costs, and further escalation of the conflict could intensify inflationary pressures, dampening spending and slowing economic growth.

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