Sonos Raises Prices by up to 25% in the UK: Brexit Blamed
Price hikes since the EU referendum in the UK haven’t been an unusual thing. The collapse of Sterling has led to significant price increases across multiple sectors. This is something we covered and predicted after the vote a number of times. Recently, manufacturer of home sound systems Sonos have announced price hikes on a number of their products.
These increases come as a result of the company paying for everything in dollars. In an announcement, the company stated “Over recent months, there has been a significant change on the US Dollar to GBP exchange rate. As a result, our existing pricing has become unsustainable and, like many other companies, we have to increase prices for all products priced in GBP.”
This is to be expected. Prior to Brexit, the pound traded for $1.46. At time of writing, the pound now brings $1.25. February 23rd is when these price increases are to be expected. The company’s major products, the Play:1, Play:3 and Play:5, have increased from £169 to £199, £259 to £299 and £429 to £499 respectively. The larger price increases have come from the more specialist lines, where the CONNECT is rising from £279 to £349 and CONNECT:AMP from £399 to £499. Anybody looking to pick up a Sonos item would be best served buying one within the next nine days, because following that the increased prices aren’t likely to fall for a considerable length of time.
Following a Trend
Sonos is far from the first company to increase prices following Brexit. Initial high-profile price hikes came from Apple (NASDAQ:AAPL 169.37 0.03%), who started by increasing prices of hardware and then a large price increase on the Apple store. In our previous coverage we’ve also spoke with PC Hardware retailer Overclockers UK, who spoke openly about the exchange rate drop and the effect this had both on themselves and the knock-on effect to consumers.
These tech increases have hit more than just base consumers, with Microsoft also raising the cost of its software and cloud-based systems. Amazon also followed on with this with a price increase on the Amazon Web Services (AWS), which a large number of companies use and rely on. Some high-profile users of include Netflix (NASDAQ:NFLX 188.54 1.80%), Vodafone (LON:VOD 228.75 -0.28%) and Adobe (NASDAQ:ADBE 173.57 -0.60%). This will certainly lead to increased underlying costs for a number of companies that will likely be passed onto the customer.
Even outside of Wccftech’s usual area of coverage price hikes have been noted. Consumer goods manufacturer Unilever (NYSE:UL 56.31 0.66%) had a well publicised row with supermarket retailer Tesco (LON:TSCO 204.45 -0.05%) following price hikes. Housewares retailer Dunelm Mill (LON:DNLM 725.50 0.62%) has also announced a future increase on the vast majority of products.
What is clear is that the bottom line of companies has been hurt by the exchange rates. The UK has a very large consumer base, particularly for tech products. The large fluctuations of a number of currencies has had a large impact on a number of companies, particularly as large numbers are based in the US and work with the dollar. The lack of a manufacturing base in the UK and the weak pound means the consumer will pay more. This is a trend that is likely to continue, particularly during the uncertainty that will come with the UK’s negotiations on exiting the EU.