Exclusive: Supermarket prices likely to rise five per cent in next few weeks
UK grocery shoppers will face sharp price increases in the coming months an industry expert has warned.
David Sables, the chief executive of Sentinel Management Consultants, which advises suppliers in their dealings with UK supermarkets, said that retailers will raise food prices by five per cent in the next few weeks with a further rise expected in January.
It comes as suppliers try to absorb mounting costs of up to ten per cent as a result of driver shortages, with rising CO2 costs expected to deepen the prices.
“Prices on the shelf will go up five percent in store, but it won’t be enough,” Sables told City PM late last night.
“The retailers will communicate an additional four to five per cent price increase which will go through in January,” he added, with the expected price hike taking inflation to ten per cent.
Shortages
The news comes as UK supermarkets are buffeted by driver shortages, lessening the availability of food, and producers face rising CO2 costs, an ingredient used to make soft drinks and beer fizzy and to stun farm animals before slaughter.
The exodus of some 500,000 EU workers is creating chronic shortages amongst road transport drivers, with European nationals previously made up 11 per cent of the work force.
Job openings for transport drivers up by 68 per cent in June compared to pre-pandemic levels according to an IFS study and Sable warned that the situation has worsened in the past 12 weeks.
Meanwhile the CO2 shortages have resulted from surging gas prices and prices for British food suppliers are expected to rise fourfold. It won’t be long before the price jump is passed on to the customer.
“Suppliers we speak to are petrified about what will happen next,” Sables concluded.