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EXCLUSIVE: Supply chain issues to cause more inflation and range reductions

A 10% rise in the cost of chicken has been predicted as part of a 'great food reset'

Symbol groups and independent retailers are likely to see further inflation and range reductions due to ongoing supply chain issues, according to Kantar.

Data released last week revealed grocery prices had risen 1.7% in the past four weeks, with the average household now spending an extra £5.94 on groceries, compared with the same time last year.

Head of retail consumer insight Fraser McKevitt told Better Retailing: “I think it is a bet that inflation is going to go up at the back end of this year,” he said. “I think we will see people moderate their behaviour.

“They tend to buy cheaper products when prices increase, so promotions become really important to them.”

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Ranjit Singh, founder and president of major UK poultry supplier 2 Sisters Food Group, said inflation was already “decaying the food sector’s supply chain infrastructure”, and predicted a 10% rise in the cost of chicken, describing it as part of a “great food reset”.

He added: “There’s no margin in the whole supply chain.”

In addition, Barclaycards’ latest report goes on to highlight how 90% of consumers are concerned about the impact of inflation on their household finances, with growing concern around the energy crisis.

Shoppers are seeking value in purchases, after discount stores saw a 29.3% uplift compared with 2019. A further 56% said if energy prices rose sharply, it would make it harder for them to spend on ‘nice to have’ items.

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