Retailers assess sales options as price of some Christmas trees to rise by 15%

A shortage of large specimens and the weak pound are driving a price hike for Christmas trees, leaving retailers unsure whether or not to pass on the cost to consumers.

Wholesale prices have risen by between 10 and 15 per cent since last year, which had already seen a 10 per cent jump since 2007.

The standard 6ft (1.8m) tree may now retail at £45 to £50, a significant increase on the £39.99 most retailers held last year.

Needlefresh managing director Chris Hood said: "Prices have gone up again partly due to lack of supply and partly due to exchange rates. Last year the increase was required just to get the growers back into reasonable positions but now we are seeing the effects of a real shortage of trees."

He said that there were virtually no trees available above 1.8m in the UK or Denmark, which would affect the price of larger specimens more heavily.

He added: "I think we are looking at 10 to 15 per cent again and it is giving cause for concern at a retail level from all sides. There are estimates that there won't be any real upturn in volume until 2012 or even 2015."

He also warned that retailers who had yet to buy stock would struggle as the pound weakens and early indications from the high street suggest that decoration sales are strong.

Jadecliff managing director Sadie Lynes agreed that the weak pound was partly responsible and that trees of 2m or taller were largely unavailable.

She also predicted an earlier season this year, saying Jadecliff is cutting back on stock so as to limit risk, despite restocking being impossible. This, she said, would lead to a "short season for us and the hype about shortages could lead to a slightly earlier season for retailers too".

The price rises mean retailers must choose whether to pass on the cost or squeeze margins with a view to retaining customers for the future when volumes increase.

Tillington tree buyer Andy Bunker said: "There is a mixed feeling on the issue and some are going to try to hold their price point. There is a mixed bag of opinion from this group. But most of us will be passing the price on because it has gone up substantially; in excess of 10 or 12 per cent on average.

"Last year we were not at a normal mark up. The price should have been £41 to £42 but we held it at £39. We can't really absorb that so the price has got to get to £45 to £50 for a 6ft tree."

But British Christmas Tree Growers Association secretary Roger Hay said: "I don't think the prices at the retail level are going to go up a great deal. I have been speaking to several growers who said they weren't going to have much increase at all. So the situation in the wider market is confused because there does seem to be a shortage of medium-sized Nordmann firs."

He said the problem stemmed from five years ago when few trees were planted in this country due to low prices. He added that despite the fact that 90 per cent of our Christmas trees are grown in this country, the 10 per cent imports were vital and "if we don't get trees from abroad we are in trouble".

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