A price hike by PepsiCo has been condemned as an “opportunistic” move likely to push more shoppers towards discount stores by wholesale bosses.
An increase of up to 7% on the wholesale price of Walkers crisps is set to come into effect on Monday, which the company has blamed on the impact of Brexit. Wholesalers told Retail Newsagent they will be forced to pass the cost on to retailers, but fear it could have a detrimental impact.
James Russell, wholesale managing director at Blakemore, said: “Brexit has caused uncertainty and I think this is massively opportunistic by PepsiCo considering the current performance of the category and the fact they’ve taken weight out of the bags not so long ago.
“It impacts the offer we can make for our customers. We have to pass the cost on to them. We’ve been told if we don’t accept the terms it won’t supply us. The value message is becoming distorted.”
Naeem Khaliq, Day-Today symbol group controller at United Wholesale Scotland, described it as a “dire” situation for both retailers and wholesalers.
He said: “I think PepsiCo is boosting its profit. Walkers is a British product and I expect it is made with British potatoes.”
Meanwhile, wholesale consultant David Gilroy said questions need to be raised about the reasoning behind the price rise when other big players are not announcing increases.
“It’s going to play right into the hands of discounters and make things even more difficult for retailers,” he said.
Sophie Boxall, of Pelynt Post Office in Cornwall, said: “It costs what it costs and if we keep cutting margins to provide cheap prices customers will never learn the true price of goods.”
The news follows Tesco’s fight against Unilever’s price hike two weeks ago. However, both wholesalers say fighting against price increases is far more complicated for them in comparison to a supermarket giant.
PepsiCo did not respond to Retail Newsagent’s request for comment before going to press.