Retail prices are expected to rise 5% as a result of growing supply chain costs, with a second wave of increases possible in the New Year.
Increases in worldwide shipping rates, alongside the impact of labour, lorry driver, and raw material shortages, are combining to put pressure on suppliers.
Chief executive of Sentinel Management Consultants, David Sables, said: “There is such a pressure on suppliers at the moment, as well as retailers, to pass those [costs] 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 5% [increases] going across the board on to the prices on shelves.”
Speaking on increased haulage costs, owner of Wharfedale Premier, Samantha Coldbeck said: “I think it’s massively concerning that haulage costs are going up so high. Obviously, the increased wages are to protect manpower, but I think the costs will get passed down to wholesalers, retailers and customers.”
While Samatha sympathised with the need to protect haulage workers, she urged companies to find a long term solution to prevent these costs from being passed down to customers.
Supermarkets have already been hit by higher supply chain costs, with Kantar reporting a 1.3% increase in prices throughout September.
The predicted increase does not consider the new rises in CO2 pricing due to shortages, according to Sables.
Sables said: “There is a chance now that when you add in extra fuel hikes, and the CO2 issue… it may be that suppliers go a second time on their prices after Christmas.”