Inflation was already running hot even before Russia’s invasion of Ukraine, reaching 4.7% for 2021 — the highest annual rate since 2008’s 3.8%. Then war and corresponding economic sanctions sent prices of oil and other commodities soaring. Retailers trying to identify the appropriate actions to take as their costs rise can find themselves in a bind. They risk losing potential sales — and customers — if they raise prices, but keeping prices static eats into their profit margins. For retailers without sufficient financial reserves, the latter option could be disastrous, particularly if inflation doesn’t moderate in coming months.
