INDUSTRY COMMENT: BHETA
THE PRICE CONVERSATION NO ONE WANTS — BUT EVERYONE NEEDS TO HAVE
As global events continue to affect supply chains and inevitably raise prices, how to address and potentially pass on increasing costs can lead to some difficult conversations. Steve Edwards, BHETA’s sector manager for DIY and garden, offers his view on how to handle the situation and how the Association can help to support.
A
s I write, the trading environment for suppliers in the home improvement and garden sector is being squeezed
from multiple directions at once. The ongoing conflict in the Middle East is exerting real upward pressure on oil, oil-derived and other raw materials – and for a sector where plastics, adhesives, sealants, coatings, fertilisers, and their packaging are central to so many product categories, that matters considerably. Moreover, it is not just the raw materials. Travel surcharges, freight premiums and insurance costs are all elevated. Suppliers who were wrestling with ‘cost volatility’ a year ago are now having to deal with something closer to a sustained inflationary condition.
All of which results in the need for
difficult and frankly uncomfortable conversations with retail partners: when, and how, to pass costs on. The question is echoing across the sector, and it’s a genuinely complicated calculation.
In this situation, it is overly simplistic to characterise the problem as suppliers wanting to raise prices and retailers resisting them. The reality is more nuanced. Both sides are navigating real pressures – retailers are acutely aware of fragile consumer confidence and the risk that visible price increases dampen demand in categories that are, for many shoppers, discretionary. Suppliers, meanwhile, are watching their margins compress in real time and know that selling at unsustainable prices is a short route to serious commercial difficulty. The timing question is particularly acute. Move too early – before cost increases are fully understood or have stabilised – and a supplier may find themselves returning to the same conversation twice within a trading year, which is certainly not ideal. Wait too long, and the margin erosion becomes structural rather than temporary. There is no single right answer, but there is a right framework.
8 DIY WEEK APRIL 2026
Above: Steve Edwards, BHETA’s sector manager for DIY and garden
Seven things both suppliers and retailers need to understand Here at BHETA, we have been working through the key factors and setting out what we believe that framework to be. In BHETA’s view, there are some fundamentals that any serious discussion about price needs to address. First, proportionality: Product costs are not just raw materials. Energy, labour, freight, processing and packaging all play a part - and their relative weight varies enormously by product type. A supplier of a highly processed item may find energy represents the majority of their cost base, not the commodity whose spot price a retail buyer has just pulled up on their screen. Telling that story clearly and credibly is essential. Second, lags: A commodity price drop in the last quarter is not necessarily good news for a manufacturer who purchased materials six months ago on a forward contract. Equally, a price spike this month may take time to feed through depending on stock positions. Both sides need to resist the temptation to treat live commodity indices as a real-time proxy for actual product cost. Third, currency: Many suppliers
are paying in dollars for imported components or finished goods.
Sterling’s relative position against the dollar can add or subtract several percentage points of cost independently of what the underlying commodity is doing – a factor that is easy to overlook in negotiations. Fourth, freight and country of origin: For large or heavy products sourced from the Far East, container and shipping costs can dwarf raw material costs in commercial significance. This is not a new lesson – the disruptions of 2021 and 2022 taught it painfully – but it is relevant again in the current environment.
Fifth, notice periods: Many commercial agreements include notice provisions, and in a genuinely inflationary period a supplier needs to be pricing future inflation into the notice window, not just current costs. A four-month notice period in a rising cost environment is commercially meaningful. Sixth, history matters: Retail buyers should resist blanket approaches to price increase requests. A supplier who has held prices for two or three years and is now asking for a meaningful increase deserves a different conversation to one seeking annual uplifts as standard practice. Penalising restraint is not a strategy that serves the supply chain well.
Seventh, specification versus commodity: The price of steel on a commodities exchange and the price of specified, processed steel usable in manufactured product can differ by a factor of three or more. Raw commodity prices can be genuinely misleading, and buyers who rely on them without understanding the conversion and processing costs are not getting the full picture.
How BHETA can help With all these variables to consider, this is precisely the kind of situation where informed, independent guidance makes a practical difference. BHETA (British Home Enhancement Trade Association) provides members with regular cost of goods reporting tracking movements in materials, freight, and energy. It is therefore the perfect place to source advice about the when and the what of price increase negotiations. So, don’t hesitate to give BHETA a call, whether for the latest information or specific advice. BHETA represents suppliers in the home improvement, garden, housewares, and small electricals sectors, providing members with insight, networking, and business development opportunities. For more information, contact BHETA Member Services on 0121 237 1130 or visit
www.bheta.co.uk.
www.diyweek.net
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