Supermarkets and shops will begin to pass on rising costs within weeks, consumers told
Shoppers could see a five per cent rise in prices at supermarkets over the next few weeks, an industry chief has warned.
David Sables, the chief executive of Sentinel Management Consultants, who advise companies in the supermarket supply chain, said that an unprecedented number of his clients are planning price increases.
He said that the difficulties facing the sector, including a shortage of HGV drivers, would cause prices to go up.
Speaking on Radio 4’s Today programme, Mr Sables said: “As a result, there is such a pressure on suppliers at the moment, as well as the retailers, to pass those on because the costs simply aren’t sustainable without some form of cost price increase.
“We have never seen this level of suppliers coming to us speaking about planned cost price increases.
“I would expect to see across the next six to eight weeks something like five per cent [increases] going across the board on to the prices on shelves.”
Mr Sables said this didn’t included the added pressure of rises in the price of CO2 as supplies run low. Suppliers have given supermarkets about 10 to 12 weeks notice of price rises, which will likely be passed on customers at point of sale.
“There is a chance now that when you add in extra fuel hikes, and the CO2 issues, that hits prices as well,” he added. “It may be that suppliers go a second time on their prices after Christmas.”
The British Retail Consortium have also warned that supermarket prices are likely to rise due to the increased commodity and shipping costs hitting the sector.
Chief executive, Helen Dickinson, said: “Food retailers are fighting to keep their prices down as far as possible.
“But mounting pressures – from rising commodity and shipping costs as well as Brexit-related red tape – means this will not be sustainable for much longer, and food prices are likely in the coming months.”
Fraser McKevitt, head of retail and consumer insight at market research group Kantar, also predicted price increases. He said that the recent wage rises for truck drivers to fill the shortage “have been so substantial I don’t see how they can avoid price rises.”
The comments come as research from the Chartered Institute of Procurement and Supply found that the shortages are expected to last long term.
A survey of 318 UK supply chain managers found that nearly a third expect the current shortages to last more than a year.
80 per cent also reported experiencing shortages this year.
Duncan Brock, the group’s director, said: “Brits are used to having products on demand but this almost instant economy was built on complex supply chains which have been pushed to the limit by Covid-19 and Brexit.
“It is becoming apparent that the shortages hitting the UK are a longer-term issue which will not be solved overnight, and consumers and businesses alike should get used to waiting a little longer than usual for the products they need.”