Majority of retailers set to raise prices due to supply chain issues
By PA News Published: 13:06, 14 October 2021
The majority of retail bosses plan to put up prices on goods by the end of the year and one in 10 have already done so, according to the boss of the industry’s trade body. Helen Dickinson, head of the British Retail Consortium (BRC), which represents the sector, said a recent poll of chief executives found that three out of five plan price rises later this year due to soaring supply chain costs. Her comments come as the boss of Poundland’s owner told the PA news agency he has seen shipping costs jump tenfold as a result of rising global demand. And Gary Grant, founder of toy store chain The Entertainer, said delays were affecting a number of UK ports beyond Felixstowe. Details come despite Chancellor Rishi Sunak playing down concerns, saying there will be a “good amount of Christmas presents available” this year despite supply chain issues. But Ms Dickinson told the PA news agency: “The supply chain issues are the priority for all businesses right now. “It is complicated because this looks slightly different for everyone, but they all see an immediacy to this issue. “They are thinking about Christmas. It is the most important period of the year for a retailer – takings for a non-food retailer in December are an average of 70% higher than other months. “They are doing everything they can right now to make sure it can be as smooth as possible.” She added that this is proving costly: “We are already seeing inflation starting to take place. “We surveyed CEOs and three-fifths said they were going to have to increase prices by the end of the year. Ten percent said they already have. “It is sadly a reality when businesses are seeing every single cost, energy, wages, other things, all rising at the same time.” Ms Dickinson said even larger retailers are struggling with higher costs, despite being able to negotiate the best deals with shipping firms. At Poundland, the boss of the discounter’s owner Pepco, told PA he has seen shipping costs rise tenfold and expects the supply chain issues to last for 12 months. Andy Bond, who was formerly chief executive of Asda, said: “You get seasonal peaks at Christmas which further exacerbates the cost issue because you’re out there buying extra vessels than you normally would. “There are some times where we have had to pay 10 times our normal rates. That’s not to say every day, but that has been the impact.” He added: “I think that we see the next 12 months remaining challenging but we feel we’re set for another good year.” At The Entertainer, Mr Grant said ports beyond Felixstowe are feeling the strain. A build-up of cargo has led to shipping company Maersk opting to divert vessels away from the Suffolk port, while similar logjams have been seen elsewhere in the world including in the US. On Thursday the Government announced a consultation on a plan to increase deliveries in the UK by temporarily changing “cabotage” rules, which govern how many trips foreign transport firms can make within another country. Currently hauliers from the EU can only pick up and drop off goods in the UK twice in a seven-day period, but the proposals would allow them to make an unlimited number of deliveries across two weeks. If approved, the plans would come into force before the end of the year and last for six months. The toy store boss said his 170 shops were “literally brimming with stock” as a result of spending the last six weeks over-delivering. But he cautioned that 50% of the chain’s stock is sold between October and December and “even with fully stocked stores at the moment our concern is that there could be gaps at Christmas”. Added in to the current issues were power shortages in China, leaving some factories only able to work two days each week, he said. Asked what he would say to consumers planning for Christmas, Mr Grant said: “I would say don’t panic. You will not see empty toy shelves.“But if as a parent you know your child wants a special item, I would recommend that you buy early. “There will not be a shortage of toys at Christmas, there might just not be the particular one that you want.” Meanwhile, in Washington DC, the Chancellor said the Government was doing everything it could to help. Speaking after meeting with finance ministers from the G7 group of leading world economies to talk about the problem, he said politicians had agreed to work more closely to solve the global crisis. Speaking to the BBC, Mr Sunak said: “We’re doing absolutely everything we can to mitigate some of these challenges. “They are global in nature so we can’t fix every single problem but I feel confident there will be good provision of goods for everybody. “I’m confident there will be a good amount of Christmas presents available for everyone to buy.” Mr Sunak chaired a meeting of finance ministers on Wednesday as the International Monetary Fund and World Bank convene in the US capital. The Treasury said Mr Sunak told the meeting of the “importance of global co-operation to ensure that supply chains are more resilient as the world emerges from the pandemic”. Speaking after the meeting, Mr Sunak said: “Supply chain issues are being felt globally – and finance leaders from around the globe must collaborate to address our shared challenges. “Today we have collectively agreed to work closely over the coming months – and together we will build a strong and resilient recovery.” Question 1 Answer saved Marked out of 6.0 Not flaggedFlag question Question text Given the economic climate and the state of the pandemic in Canada, how will Canadian consumers react to significantly higher prices?
Will higher prices impact Canadian consumers purchasing of their desired Christmas gifts?