Prices In Supermarkets Set To Rocket After Christmas
A leading retail consultant has warned that supermarket chains need to start accepting significant cost price increases from suppliers or face the prospect of empty shelves next year.
Ged Futter from training and consultancy firm The Retail Mind told trade publication The Grocer that some suppliers were facing double-digit input cost inflation and retailers needed to face up to the reality that these costs have to be passed on.
Kantar’s data last week showed that grocery prices were up 3.2% in the latest four weeks, the highest rate of inflation it had recorded since June 2020. However, Futter suggested that the price of food and drink was likely to “rocket up” after Christmas.
He told The Grocer that his clients had taken in excess of £100m inflation to their retail customers over the past six months, with the average increase being over 13%.
“The inflation they [suppliers] are experiencing is unprecedented,” he said. “And they are already looking at the additional costs for next year that they need to recover.
“A few of the retailers are approaching the increases knowing it is inevitable, some believe it will disappear if they simply ignore it. The ostrich approach to cost increases will simply mean they have empty shelves when the suppliers stop delivering.”
NAM Implications:
- Unprecedented cost inflation in unprecedented times…
- Where a consumer’s perception of increased prices matters more than politicians’ stats…
- NAMs need to explore the implications for their brands of 10%+ shelf-price increases in some categories.
- Unless you prefer to sharpen your fire-fighting skills in the New (unprecedented) Year?
This article first appeared in KamCity.
