Australian retailer Wesfarmers has said it will increase prices on various items as higher freight and fuel costs linked to the Iran war affect its business.

During the Macquarie Australia Conference in Sydney, chief executive Rob Scott was reported by Reuters as saying: "Obviously, when cost prices are going up, some prices are going to have to go up."

The company said fuel surcharges from international container shipping companies and domestic transport providers were having “the biggest impact” on its cost base.

It said goods that use petrochemical inputs such as PVC pipes and other building supplies are expected to become more expensive.

Scott added: “There will be ​some costs that do need to flow through, like obviously transport costs, fuel costs are having an impact on supply chains.”

Wesfarmers also said its lithium mining operations were facing cost pressure from higher diesel prices, although Scott said fuel was only a “pretty small component” of total operating costs.

He commented that fertiliser prices had also been affected by the conflict.

The company said government underwriting of purchases had helped it secure urea shipments despite price volatility.

The report comes after several Wesfarmers retail brands launched a joint consumer initiative last month.

From 14 April, Bunnings Warehouse, Kmart, Officeworks, Priceline Pharmacy, and Target started offering a six-month free trial of the OnePass membership, which includes free delivery with no minimum spend on eligible orders.

The trial is available to new customers who sign up by 14 May.

Bunnings managing director Michael Schneider said free delivery was one of the most direct ways the brands could ease the financial pressure customers may be feeling.

"Wesfarmers flags price rises amid higher freight costs – report" was originally created and published by Retail Insight Network, a GlobalData owned brand.

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