Cost Of Living Crisis – Supermarket Hikes & Supply Chain Strain
The cost of living crisis is becoming increasingly problematic in our day-to-day lives. Everything’s gone up, from cat food to tins of soup and beans, and now even Lurpak butter (recently seen priced at £9.35 in Iceland).
A huge 9 out of 10 adults reported an increase in their cost of living in March, and nearly a quarter of adults reported difficulty in paying their household bills in the last month compared with a year ago, due to the cost of living crisis
We know what the cost of living crisis means for us, the consumer, but it’s also important to understand what it means for business.
Ultimately, as we know, a rise in inflation for suppliers will usually result in soaring costs being passed on to retailers and in turn, the consumer.
This week saw Tesco bring down a firm fist by announcing it would no longer stock pet food brands Whiskas, Dreamies and Pedigree after it refused to pass on price increases from the manufacturer, Mars, to its customers. This comes following Tesco’s previous ban on stocking Heinz products, including beans and salad cream, for the same reason.
The supermarket has publicly voiced its concerns over the cost of living crisis and unjustifiable price rises, backed by Asda and Sainsbury’s, and a stream of photos being posted online of empty shelves and price stickers showing the hike.
Suppliers have attributed recent price increases to the rise in the cost of energy, cost of labour, food inflation, rail strikes, increase in the cost of fuel, a shortage of HGV drivers, unpredictable weather and Russia’s invasion of Ukraine, as well as the fallout from Brexit. In summary, there are a whole host of reasons for the supply chain looking fragile and uneasy. It’s not just food, of course, it’s furniture, DIY equipment and building materials, electrical goods and costs of services, to name a few.
Regardless of the type of business, you are likely to be impacted by the cost of living crisis. You may, as a result, consider a restructuring or complete change in direction for your business and its short and long-term plans. You may consider a sale or asset sale, investment and introduction of new shareholders, buying and selling of commercial property or other assets.
If you require any assistance or advice on limited companies, share sales and acquisitions, please get in touch with Serena Willis (one of our specialist company commercial solicitors) by calling 01752 203500 or emailing directly via email@example.com.