Shoppers face a “price shock” in the coming months as merchandise sold at record discounts in the sales gives way to stock made more expensive by the slump in sterling.

Next, one of the three biggest clothing retailers, said yesterday that the exchange rate would be a big issue for the retail sector over the coming year.

The Times has learnt that Monsoon Accessorize is facing a supplier revolt because of the slump in the pound. It has written to suppliers asking for a 5 per cent cut in costs. Peter Simon, the fashion chain's founder, who took the retailer private last year in a deal that valued it at £755 million, wrote to suppliers before Christmas asking for a “contribution” after the slump in the pound and poor conditions on the high street. After Christmas the group sent another letter to suppliers asking for a firm 5 per cent reduction.

The pound has fallen more than 25 per cent against the dollar since the summer, driving up the prices of goods imported from the Far East. Anita Manan, senior analyst for Experian, said yesterday that customers had grown accustomed to the record discounts seen either side of Christmas and warned of a re-adjustment period.

Simon Wolfson, chief executive of Next, said that after interest rate cuts and declines in fuel bills, retailers are likely to be able to pass on price increases to consumers. “If you look at everything, also food, these prices have risen and the consumer has had to swallow them. The nature of our product is that it isn't a commodity. What matters is whether you like a pair of jeans, not whether you will pay £20 for them instead of £21.” In Next's case, any price rises are likely to be felt in the summer rather than the spring because it hedges against currency movements six months ahead.

Sam Hart, at Charles Stanley, the broker, said: “Sterling's weakness is expected to be a major issue for the group, as a high proportion of goods are sourced from Asian countries with dollar-denominated currencies, and to a lesser extent from the eurozone. The full impact is expected to be felt in the second half, and is likely to lead to significant upward pressure on prices and downward pressure on gross margin.”

Like-for-like sales at Next's 347 stores fell by 7 per cent in the five months between July 29 and December 24. Unlike Debenhams, which yesterday reported like-for-like sales down 3.3 per cent during the 12 weeks to January 3, Next held sales before Christmas.

Shares in Next rose 136p to £12.27 - 12 per cent - yesterday, despite Andrew Varley, the property director, selling 10,000 of his shares after the rise yesterday afternoon.

Debenhams, which imports 65 per cent of its goods from the Far East, is hedged at $1.90 until the end of March. Shares in the department store group rose 5p, or 20 per cent, to 34p as analysts welcomed the fact that like-for-like sales declines were in line with expectations.

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