Supermarkets should work together to save Christmas says supply boss

Supermarkets should work together to save Christmas says supply boss as one in six shoppers have been unable to buy essentials in last two weeks while fuel shortages continue

  • About one in six adults in Britain have been unable to buy essential food items in the last fortnight
  • Ministers seek to allay fears as a number of companies warn there may be shortages this Christmas
  • And a third of retailers in the South East have warned they have either no or limited fuel supplies
  • Boris Johnson has appointed ex-Tesco boss Sir Dave Lewis as his new supply chain crisis tsar

Britain’s supermarket giants should ditch their rivalries and work together to save Christmas, a supply boss has said as new polls find that about one in six adults in Britain have been unable to buy essential food items in the last fortnight, while 12 per cent of filling stations have run out of fuel in the South East and 17 per cent have only one grade of diesel or petrol.

Shane Brennan, CEO of the Cold Chain Federation, told retail magazine The Grocer: ‘The biggest choice every one of the major supermarkets has got this week is: are we going to have a survival of the fittest Christmas or are we going to all work together and try and get through Christmas?

‘The problem with crisis is everyone fights to protect their own. So what you are finding is businesses fighting to protect the certainty of their own deliveries and that pushes against collaboration and co-ordination of efficiencies.’

It comes as statistics from the Department for Transport show that around a third of lorries on the road are completely empty while those containing goods are on average only around 60 per cent full due to ongoing supply chain woes.

Chill Chain boss Jack Fleming added: ‘If the HGV network was more effectively utilised there would be more than enough distribution capacity to go around. But the people that would enable that change are running around with their hair on fire just trying to apply more pressure to their haulier to get them to deliver stock.’ 

A new study by the Office for National Statistics has found that 17 per cent of adults discovered that the essential food items they wanted to purchase were unavailable, while almost a quarter found the same problem with non-essential food items.

And a third of retailers in the South East have warned they have either no or limited fuel supplies, with research by the Petrol Retailers Association finding 12 per cent of filling stations have run out of fuel in those areas and 17 per cent have only one grade of diesel or petrol. 

It came as a survey of 1,000 people by retail magazine The Grocer suggested two-thirds were worried or very worried at the prospect of food and drink shortages over Christmas.  A number of companies have warned there may be shortages this winter, with Nestle saying it was facing challenges that could hit the availability of products including Quality Street chocolates while Walkers Shortbread in Scotland is facing difficulties due to a lack of staff. Hundreds of thousands of shoppers have already booked their delivery slots for Christmas. British supermarket Waitrose, which is owned by John Lewis, said it saw 22,000 slots booked by lunchtime on the first day of releasing its dates last week.

Cabinet Ministers are now desperately seeking to allay mounting fears that staff shortages, soaring energy bills and global supply-chain woes will lead to panic-buying in the run-up to Christmas, with toys, clothes, chocolate and toilet rolls among products that could become more scarce within weeks as manufacturers wrestle with soaring costs.

Boris Johnson has appointed former Tesco boss Sir Dave Lewis as his new supply chain crisis tsar with a remit to clear ‘blockages’ and ‘pre-empt potential future ones’ after dismissing concerns over labour shortages, Britain’s creaking supply chain and fears over rising inflation.  

Education Secretary Nadhim Zahawi said that the fast-track scheme will be expanded to allow up to 5,000 people to be trained as HGV drivers. But with the free courses not starting until next month, they will do nothing to alleviate concerns about shortages this Christmas.

Labour’s Shadow Transport Secretary Jim McMahon thundered: ‘This is a drop in the ocean and it’s clear the Government is either unwilling or unable to grasp the scale of the challenge facing Christmas. The industry has warned that for Christmas food deliveries alone, an extra 15,000 drivers will be needed – not to mention the colossal gap ministers have already failed to plan for or properly address.

‘If the Prime Minister does not treat this crisis with the seriousness that is required and show real ambition in tackling it, working people will continue to pay the price with rising costs, rocketing energy bills and bare shelves this winter.’       

Half empty shelves of grocery products at a Tesco branch in Wimbledon today

Half empty shelves of ready meals at a Tesco branch in Wimbledon today

Empty shelves in an ASDA store on October 9, 2021 in Cardiff, Wales

Empty shelves in a Sainsbury’s supermarket in London Colney in Hertfordshire

Empty shelves in an ASDA store on October 9, 2021 in Cardiff, Wales

Motorists queue for fuel at a Morrisons petrol station in Reading, Berkshire

Signs reading ‘Sorry out of use’ are displayed on the pumps of a closed petrol station in London

Analysis of price rises in the last year shows the cost of a second-hand car has risen more than £1,600, a tank of fuel is up more than £10 and the price of a pint of beer is creeping close to £4

Exclusive research for the Daily Mail by the Centre for Economics and Business Research (CEBR) also revealed how inflation will cost the typical family of four an extra £1,800 by the end of this year. Meanwhile, a retired couple can expect to see living costs rise by more than £1,100, and a lower income couple could be stung by nearly £900

The driver shortage across the UK has now spread into the bus network as public transport staff swap bus routes for work as truckers.

The wage increase promised to attract new HGV hauliers has led public transport staff to make a change, impacting the number of journey’s on offer and resulting in the axing of others.

Bus drivers can earn £32,500 on average, but can now earn up to £78,000 behind the wheel of a lorry instead.

Operators blame road haulage bosses for poaching their drivers, and have said they now need 4,000 new recruits just to keep the industry moving.

Nearly one million letters have been posted across the UK, asking HGV licence-holders who have left the industry to return.

Bus drivers are also being targeted in the recruitment drive.

As a result, there are now pockets of driver shortages across the country, with areas in Scotland, the north east of England, Bristol and south Gloucestershire being hit hardest.

Bosses at First West of England have said the problems are ‘unlike any other the UK transport industry has faced’, and blame a mixture of poaching, the coronavirus, Brexit and strike action at the DVLA for the shortages.

Amid fears of food shortages in the coming months and panic buying leading to empty supermarket shelves, one in six adults have been unable to buy essential food items in the last fortnight.

Some 17 per cent of adults said they had not been able to purchase such goods because they were not available, according to the ONS.

While almost a quarter of adults said the same for non-essential food items, the ONS found after analysing responses from 3,326 adults between September 22 and October 3 as part of its Opinions and Lifestyle survey. 

It asked about people’s experiences of shortages over the past fortnight and overall, 57 per cent of people said everything they needed was still available to buy.

One in seven residents were unable to buy fuel as fears of petrol shortages and struggles with HGV driver recruitment led to drivers queuing for hours to get fuel and petrol stations being forced to close due to low supplies. 

Six in 10 people said their food shopping experience had been different to usual, while 43 per cent said there was less variety, and 14 per cent had to go to more shops to get what they needed.

A fifth of Britons said items that they needed were not available but they could find a replacement, with a further fifth saying they could not find a replacement.

Thirteen per cent of adults also reported waiting longer for prescriptions and four per cent of people had to go to more pharmacies to find what they needed.   

Supermarkets are not the only place that are experiencing shortages, as footballer Marcus Rashford said some of the food banks he works with have been experiencing supply issues.

He told BBC Breakfast: ‘They’re struggling to do what they love doing because there’s a shortage of food and of course it’s something that we’re going to have to find an answer to, and quickly as well because you know people are out there and they need the meals and especially going into winter.’

Elsewhere, the Prime Minister appointed former Tesco boss Sir Dave Lewis as his new supply chain crisis tsar with a remit to clear ‘current blockages’ and ‘pre-empt potential future ones’.

The 56-year-old is nicknamed ‘Drastic Dave’ due to the lengths he will go to to turn around businesses, including job cuts and slashing prices, and ‘Diamond Dave’ because of his success at Britain’s biggest supermarket and at Unilever before that.

Mr Johnson has insisted it is not his job to ‘fix every problem in business’ caused by Brexit and the pandemic and repeatedly dismissed concerns over labour shortages, Britain’s creaking supply chain and fears over rising inflation.

But the appointment, welcomed by business leaders, is a sign Downing Street has growing concerns about the crisis after weeks of product shortages, queues at petrol stations and the growing threat of Christmas staples such as turkeys, pigs in blankets and gammons being scarce. 

Aldi is hiring 1,500 temporary store staff to deal with the expected Christmas rush and Island, which has seen frozen turkey sales up 409 per cent compared to the same period last year, has upped its order from suppliers by 20 per cent. 

Aldi recruitment director, Kelly Stokes, said: ‘We always need extra support over the busy Christmas period but this year especially, temporary store colleagues will play a vital role in keeping our shelves stocked as the nation prepares to reunite with their loved ones after missing out on festive celebrations in 2020.’

Mr Johnson has a lot riding on the festive period, having promised last week that ‘Christmas will be considerably better than last Christmas’.

Former Tesco chief executive Sir David Lewis has been appointed as the Government’s supply chain adviser

Partially empty shelves at a Sainsburys supermarket in London Colney, Hertfordshire, today

Supermarkets are not the only place that are experiencing shortages, as footballer Marcus Rashford said some of the food banks he works with have been experiencing supply issues

 

A survey has revealed that families will be doing more to celebrate this year than they did before the pandemic despite concerns about shortages wreaking havoc.

Households across the UK will be pulling out all the stops to make sure this festive season is more special than ever, after missing out on much of the fun last year due to Covid-19 restrictions.

The findings are published in the second edition of the M&S Family Matters Index, out this week, which explores the priorities, challenges, ambitions and plans of families.

The South East is STILL in the grip of fuel crisis: One third of petrol stations are dry or short on supply despite Grant Shapps’ claim UK levels are ‘close to normal range’ 

The South East is still in the grip of a fuel crisis – with a third of petrol stations dry or short on supply – despite Transport Secretary Grant Shapps claiming supply levels are ‘close to normal range’. 

The Petrol Retailers Association’s research showed that 12 per cent of filling stations have run out of fuel in the region, while 17 per cent have one grade of diesel or petrol.

Under 75 per cent of petrol stations have both diesel and petrol in London and south-east England, as opposed to 90 per cent outside those areas. 

The figures are at loggerheads with Mr Shapps’ claims that the issue is almost entirely over. 

He told GB News: ‘In London and the South East, supply levels in petrol stations are getting very close to the normal range and we’ll see them opening up in a day or too. 

‘There was never a shortage of fuel in the refineries and storage stations. As soon as people queue up to fill up fuel you get into a situation where you get a run on something like we saw with toilet rolls. 

‘The amount of fuel in the petrol stations themselves is about double what it was at the low point.’   

Some 39 per cent of 5,000 British adults said they will do more to celebrate Christmas than they did before the pandemic hit, with more effort also planned for Easter, Diwali and Hannukah.

One in three say they will do more in future to celebrate family birthdays, and more than one in five say this of New Year’s Eve and relationship anniversaries. 

However this year families face the threat of the lack of supplies reaching the UK due to labour shortages, Britain’s creaking supply chain and fears over rising inflation.

France’s European Affairs Minister Clement Beaune even threatened to cut off supplies of turkeys and other goods unless continental fishermen are allowed to work in British waters. 

It is the latest threat from across the Channel in a dispute over access to rich fishing grounds from next year, including the possibility of cutting electricity supplies to Channel Islands Jersey and Guernsey.

It came as fears were raised of another toilet roll shortage as industry bosses warned spiralling costs will hit production – and baked beans became the latest food staple to face price increases.

Downing Street said former supermarket chief executive Sir Dave will advise the Prime Minister and Chancellor of the Duchy of Lancaster, and work with Government officials to quickly resolve acute, short-term issues. 

He will also co-chair a new supply chain advisory group and be based in the Cabinet Office.

A No10 spokesman said: ‘This includes both identifying the causes of current blockages and pre-empting potential future ones, and advising on resolutions either through direct government action or through industry with Government support.’

Mr Johnson said: ‘I’m pleased that Sir David Lewis is joining the team who have been working on future-proofing our supply chains across the United Kingdom as we recover from the pandemic. There are currently global supply issues which we are working with industry to mitigate and Dave brings a wealth of experience which will help us continue to protect our businesses and supply chains.’

Business leaders have welcomed the appointment and said they hope it is a sign that No 10 is willing to listen to their concerns.

Hannah Essex, Co-Executive Director of the British Chambers of Commerce, said: ‘We very much welcome the appointment of Sir David Lewis.

‘Hopefully Sir David, and the new groups he co-chairs, will be able to hit the ground running and urgently address some of the critical issues damaging business conditions. 

The energy crisis has been blamed, in part, on a shortage of natural gas caused by Vladimir Putin allegedly ‘choking’ supplies to Europe

Experts claimed Putin was using the crisis as leverage over the Nord Stream 2 pipeline project, which is run by Gazprom. Pictured: An output filtration facility of a gas treatment unit at the Slavyanskaya compressor station

Kremlin confirmed existing gas transit routes already allow for more supplies. Pictured: Nord Stream 2 gas pipeline project logo on a large diameter pipe at Chelyabinsk Pipe Rolling Plant

Paper industry boss warns it’s ‘very, very clear’ that factories in ALL sectors across the country could close within weeks as gas prices continue to soar 

One industry leader has warned the Government that factories across the country could stop production due to rising prices.

Andrew Large, director-general at the Confederation of Paper Industries, attended a meeting on Friday with the Business Secretary and other representatives of energy intensive industries to discuss the wholesale gas crisis.

Speaking to the BBC Radio 4’s PM programme afterwards, Mr Large claimed it was ‘very clear’ across all of the sectors that there are ‘serious’ risks factories could stop all activities as a result of the gas prices being too high. 

At his Conservative Party conference speech earlier this week, Mr Johnson promised that the UK would become a ‘higher-wage, higher-productivity economy’. 

Mr Large said: ‘When we talked with the Secretary of State this afternoon, it was very, very clear across all of the sectors that there are serious risks of effectively factory stoppages as a result of the costs of gas being too high to bear, and in those circumstances, there will be a gradual knock on effect through supply chains, right the way across manufacturing, consumer retail and other products. And so the risks are very, very real.’

When asked what this would mean for the paper industry, Mr Large said it would be incredibly damaging for profitability.

But Mr Large did say the meeting was a ‘positive, first step’ to look at the solutions they had proposed and that Kwasi Kwarteng ‘clearly furthers our desire to avoid any potential supply chain disruption’.

The Energy Intensive Users Group (EIUG) echoed Mr Large’s comments, saying it welcomed the opportunity to meet the Business Secretary and is pleased he wants to find practical solutions to the challenges members face going into this winter. 

UK Steel boss Mr Stace told BBC Radio 4’s World At One: ‘The prime minister this week is calling for a high wage economy.

‘The steel sector already does exactly that – we pay our workers 45 per cent higher wages in regions where steel is, they’re highly skilled as well.

‘If you’re paying as much for gas and electricity as we are as a steel sector, then these unprecedented price rises are hurting us now today.

‘If the prime minister and government does nothing to help us, they could start to strangle steel production here in the UK and rather than working towards a high wage economy, we’ll actually be walking blindly towards a low wage economy.’ 

‘The increasing pressure that businesses, especially SMEs, are facing around supply chain costs and disruption, labour shortages, price rises, soaring energy bills and taxes is becoming dire.’

Meanwhile, a French minister threatened to cut off supplies of Christmas turkeys unless continental fishermen are allowed to work in British waters. 

Paris’s European Affairs Minister Clement Beaune lashed out at the UK’s Brexit ‘failures’ and said that France’s trawlermen would not ‘pay the price’ for the UK’s decision to leave.

It is the latest threat from across the channel in a dispute over access to rich fishing grounds from next year.

French fishing barons earlier this week gave Britain two weeks to grant them more access to its waters or face being cut off from crucial Christmas supplies.

They handed down the ultimatum a day after skippers vowed to block the port of Calais and the Channel Tunnel unless their demands were met.

Speaking to BFM TV in France, Mr Baume – one of Emmanuel Macron’s most outspoken ministers, vented on the subject again. 

As the gas crisis escalated, Ofgem warned there will also be a ‘significant rise’ to the cap on energy bills – hitting millions of Britain’s poorest people – with soaring energy prices set to push average annual bills through the £2,000 barrier for the first time. 

Ofgem chief executive Jonathan Brearley, didn’t put a figure on it, but said there will be a ‘significant rise’ in the price cap set by the industry regulator which helps to control the cost of gas and electricity in the UK. 

He didn’t knock back claims that fixed and other deals could reach £2,000 in 2022.

‘We can’t predict everything, and the wholesale market, as we’ve seen, has gone up and down extremely quickly so we can’t predict fully what that will be,’ he told BBC Radio 4’s Today programme. ‘But, looking at the costs that are in the system, we are expecting a significant rise in April.’

But Mr Brearley added that the current price cap will remain until April. ‘We have no plans to raise the price cap before April,’ he said.

In the face of the ongoing energy crisis, London-based money-saving expert Martin Lewis has urged customers to ‘do nothing’.

He said those who want cheaper energy deals shouldn’t shop around like normal – instead he insisted ‘inaction is now the best action’.

Speaking on his eponymous ITV show on Thursday, Martin said customers should pick deals that match their energy providers’ price cap – or wait until they are given one when their current deal ends.   

The finance expert explained: ‘Do nothing, do nothing, energy prices are rising, energy firms are falling. The cheapest fixes are £500 a year higher than they were just a month ago.

‘Shocking. People are panicking. Do nothing. Inaction is now the best action,’ he added. 

Explaining the reasons behind the surging prices, he said: ‘The wholesale gas price is the price firms pay, and in the UK a lot of our electricity is heated by gas so it hits the electricity price too, it was normally about 50p/therm, you’ll see it has exploded in the last few months – it’s now well over five times the normal amount and that’s hideous.’ 

The energy crisis has been blamed, in part, on a shortage of natural gas caused by Vladimir Putin allegedly ‘choking’ supplies to Europe to pressurise regulators into approving the controversial Nord Stream 2 pipeline.

Mr Johnson waded into the row, branding the link a threat to energy security and suggesting the decision to bypass Ukraine to bring supplies direct to Germany would damage the Ukrainian economy.

A No 10 spokesman said: ‘Although Nord Stream 2 will not directly impact the UK’s energy security, it could have serious implications for central and eastern European countries.

‘Some European countries are nearly wholly dependent on Russian gas, which raises serious concerns about energy security.’

In comments reported by The Times, the spokesman also warned about the damage to Ukraine, which currently hosts the largest pipeline network for Russian gas and benefits from large transit fees. 

He added: ‘Nord Stream 2 would divert supplies away from Ukraine, with significant consequences for its economy.’

The natural gas price is currently hovering at around £2.40 a therm – down from more than £4 – after traders were reassured by Putin hinting that Russia would consider increasing exports.  

He said: ‘So, our paper mill will be wanting to operate 24/7, 365 days a year, with the exception of planned stoppages for maintenance and so on. So the financial sustainability of that paper mill is dependent upon being able to maximise its uptime.

‘Every minute that the machinery isn’t working, every minute that paper isn’t being produced is a damage to the profitability of the sector and a damage to the future investment potential and opportunities going forward.’ 

The South East is still in the grip of a fuel crisis despite Transport Secretary Grant Shapps today claiming supply levels are ‘close to normal range’. Pictured: Queues for Esso in Ashford

The Petrol Retailers Association’s research showed that 12 per cent of filling stations have run out of fuel in the region, while 17 per cent have one grade of diesel or petrol

Under 75 per cent of petrol stations have both diesel and petrol in London (pictured) and south-east England, as opposed to 90 per cent outside those areas

It comes as Transport Secretary Grant Shapps told Sky News ‘we’re right at the tail end’ of the situation with fuel supply pressures

Will the lights stay on this winter? National Grid warns of a greater risk of blackouts and says electricity supplies will be ‘tight’ this year after undersea cable fire 

A map showing the various electricity cables that bring in electricity to the UK from the rest of Europe. The IFA link is seen bottom right in green 

Britain faces ‘tight’ electricity supplies this winter after a fire disrupted a vital cable bringing energy from France – loading fresh pressure onto a system that is already being stretched to the limit by high demand and limited supply.  

The National Grid said the incident at a connector station in Kent last month had cut the amount of energy that can be imported via the 1FA undersea cable – which runs under the English Channel to Calais – by half. 

By October 23, 1GW of power should be restored following repairs, but the full capacity of 2GW will not be reached until more work due to last until March next year.  

European wholesale gas and power prices have rocketed this year due to lower-than-usual gas stocks this summer, reduced supply from Russia, the onset of colder temperatures and infrastructure outages.

High UK wholesale gas prices have helped to lift wholesale power prices as gas plants account for around 40% of electricity generation in Britain. 

It comes as Transport Secretary Grant Shapps told Sky News ‘we’re right at the tail end’ of the situation with fuel supply pressures.

He said in ‘most parts of the country’ problems have ended, and that London and the South East are the only two areas ‘where we’re seeing any continued problems’.

He added that around 3,500 people have applied for provisional HGV licences in the past week.

The Government is also prepared to ask the military to drive HGV lorries until Christmas, after they have already stepped in to help due to recruitment issues heightened by Brexit and the Covid pandemic. 

Senior Government sources told the Telegraph that they are willing to ask for an extension of the Military Assistance to Civilian Authorities (MACA) order in a bid to prevent shortages of food and other essential items this Christmas.

The original MACA order is understood to last 30 days, but a Government source told the publication that it could be extended if problems persist past the beginning of November, when the order will run out.

Andrew Large, director-general at the Confederation of Paper Industries, said its members are being ‘affected very, very severely’ by cost increases, with toilet roll and packaging among the items that could be hit hardest.

He said: ‘They’re seeing their costs go up through the roof. It’s damaging their profitability and in some cases it’s causing them to manage their production rates so as not to expose themselves to the very, very highest costs.’

Meanwhile, baked beans have become the latest victims of soaring inflation – with the head of manufacturer Kraft Heinz revealing the cost of the breakfast staple will have to go up.

Miguel Patricio, CEO of Kraft Heinz, which makes a range of other products including Philadelphia spread and Capri Sun, said that inflation was widespread globally and costs were rising.

‘In previous years there was inflation in coffee because of a bad crop or a bad crop in beans – what is different now is that this inflation is across the board,’ he told BBC Radio 4’s Today programme.

‘So it’s impossible to navigate through this moment of inflation without increasing prices. It’s up to us, and to the industry and to other companies to try to minimise these price increases.’

One in ten British businesses put up their prices in the past month due to the rising costs, the Office for National Statistics’ (ONS) latest business survey for September shows.

Meanwhile, nearly a third of companies have seen a higher-than-normal increase in running costs and many have been forced to pass this on to customers.

Companies in construction, services and manufacturing were the worst hit as 10 per cent said they needed to raise prices last month, up from 8% per cent in mid-August and 4 per cent early in 2021.

The data showed that, of these, nearly a quarter, 23 per cent, were retailers in consumer-facing sectors, and 25 per cent were in the manufacturing industry.

The stark data came as the soaring cost of electricity and gas hit industries such as steel, glass and chemicals, meaning consumers will soon be paying more for a huge number of products including cars, building materials, food packaging and even toilet roll.

Factories have moved to reduce their output to save on costs as the price of energy went through the roof with some demanding Government support to keep running.

It came as the Bank of England’s new chief economist, Huw Pill, used his first interview in the in the job to warn that Britain faces a ‘greater than expected’ rise in inflation over the coming months, which with further hammer households and businesses.

Mr Pill said he expects increasing costs of living ‘should subside as the pandemic recedes’, but with inflation already at a nine-year high of 3.2 per cent, he gave the chilling warning: ‘The magnitude and duration of the transient inflation spike is proving greater than expected.’

Britons and their businesses are being battered by a ‘perfect storm’ of inflation and supply chain problems with experts predicted inflation could still reach 5% by Christmas.

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