‘TSUNAMI’ OF PRICE RISES ON THE WAY
Supermarket chains braced for 5% increases
SHOPPERS are being warned of a “tsunami” of supermarket price rises in the run-up to Christmas.
Major food suppliers have bagged a five per cent price increase from grocery chains which is expected to be passed on to consumers.
The warning from David Sables, chief executive of negotiations specialists Sentinel Management Consultants, comes after Morrisons issued a similar warning of “industrywide” hikes.
Sables told trade journal The Grocer: “We have seen suppliers negotiating around five per cent price increases throughout the summer months. Many are starting to come to fruition.
“Retailers will try to soak it up. The specification of own-label products might slide. But most likely is consumer price increases.”
A combination of truck driver shortages, the pingdemic and Brexit continues to affect the supply chain while poor harvests around the world are making the problem worse.
Some suppliers are hanging on by their fingernails
INDUSTRY LEADER ON THE MOUNTING CRISIS
One leading supplier, who did not wish to be named, told The Grocer: “A tsunami of price increases is heading towards our supermarkets.
“Some suppliers are hanging on by their fingernails trying to reach the end of the year, but many can no longer wait and supermarkets have accepted that, without price increases, they will cease production.”
Morrisons boss David Potts issued a similarly stark message of price rises ahead of the festive season but added supermarkets would do their best to absorb them.
He said: “The sheer competitiveness of the British supermarket industry suggests every effort is always made to mitigate those price points.”
But he hinted that some areas like clothing and the non-food aisles such as gift sets and novelties would be hit as shipping costs from the Far East have rocketed 10-fold in a year.
Meanwhile, border checks on EU goods coming to the UK could be delayed amid fears they might add to the supply crisis. Reports say Whitehall officials are in talks after postponing the introduction of the rules, weeks before they are due to come into force.
The paperwork checks relate to EU imports of animal origin and high-risk foods.
Adam Marshall, former director general of the British Chambers of Commerce, said: “From a whole economy perspective, given the supply chain crisis and the inflation pressures, delaying friction on imports means no additional transport costs.”