Christmas shopping: Consumers will have to ‘take what they can get when they can get it’ in face of supply chain problems

Food prices are set to continue to rocket in the new year, while consumers will have to “take what they can get when they can get it” in the face of shortages of their usual purchases, MSPs have been told.

Wholesalers are turning to local suppliers to combat shortages in the global supply chain, but these come at a price and may result in less choice, retail experts have warned.

Speaking at Holyrood’s economy committee on Wednesday, panellists said there were already indications that food prices were set to continue to rise in January.

They pointed to a recent 40 per cent increase in the price of dairy products and a 25 per cent hike on the cost of pasta. Panellists said the crisis could continue for at least 18 months, until labour issues “iron themselves out”.

Shoppers in Glasgow.

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Colin Smith, chief executive of the Scottish Wholesale Association, warned a combination of Brexit, the pandemic, a shortage of HGV drivers and problems recruiting staff in the sector meant that wholesalers were looking to local, more sustainable supply chains, which in turn meant products which consumers expected would not necessarily be available.

He said local authorities also needed to become more flexible as their usual products, supplied to institutions such as schools for children’s lunches, could not be imported.

Ewan MacDonald-Russell, head of policy and external affairs at the Scottish Retail Consortium, warned while popular Christmas products would be available over the coming month, the choice of the range of festive foods would be limited compared to normal years.

He said: “There might be three pickle varieties rather than five or six pickles, there might not be as many types of mince pies. So you’ll still get mince pies and pickles, just not the range we would like to offer that you’re used to.

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"That’s the way we can manage matching supply chain disruption with getting things right in store for consumers.”

Mr Smith said a usual two-week lead time of ordering wines coming in from Europe had increased to two months and warned the global supply chain was very “vulnerable to disruption”.

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He said: "We don’t see any end in sight of this for 18 months. It’s just a cacophony of problems.

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“Product availability is a big issue for us. We are reliant on the national supply chain.

"A lot of food comes in from the EU, up through England and into Scotland, so we are at the furthest end of the supply chain. So any problems further down south means stuff doesn't get into Scotland.”

He added: “There's a lot we’re trying to doing in wholesale here in Scotland to create more sustainable supply chains and routes to market.”

Mr Smith warned wholesalers have had to adapt to tackle shortages, but said consumers needed to do the same.

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He said: "It’s extremely difficult for our members to meet the minimum requirements suppliers are demanding of them.

"We're seeing food price increases. The cost for us to serve a convenience store has gone up massively. We’re already seeing more coming through for January.

"Consumers expect everything to be on demand and on the shelves when we want it, but looking back 30, 40 years, we were buying locally and we were buying seasonally.

"I think when you look at that local supply chain, we have to educate that people are going to have to take what they can get when they can get it.”

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Mr Smith added: "I think with local authorities, delivering into the public sector, there needs to be more flexibility in the substitutes we can give. A lot of the schools are hand-cuffed in what they can and can't take.”

He said one supplier had faced barriers when it had tried to source an alternative pizza for school lunches for a local authority client as the usual brand was unable to be shipped in from Europe.

Mr Smith said: “One of our suppliers went out and got a pizza made to the same spec in Scotland, but it was more expensive and the school were like ‘no, we can’t afford that’.

“The wholesaler did his best to make sure that school got what it required, but if we’re going to go down the local food route, that is going to be more expensive and that’s something local authorities need to bear in mind.”

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Mr MacDonald-Russell said a short-term cash injection had been put into tackling the HGV driver crisis ahead of Christmas, pushing prices up.

In September, the Road Haulage Association said the UK driver shortage had increased from 60,000 to 100,000, with some of the major supermarkets offering sign-on bonuses of thousands of pounds to attract drivers, leaving smaller companies unable to compete.

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