Google+ Twitter Pinterest Facebook LinkedIn Wordpress

The Real Price of Inflation

The Logistics and Supply Chain Specialists Gideon Hillman Consulting UK, explore the effects of Inflation on consumerism and the logistics industry…

Grocery prices rose by a record 0.2% in the 12 weeks to 1st January 2017, the first inflation in just over two years; add to the equation the sharp decrease in the value of sterling since the Brexit vote of June 2016 and you are left with an increase in the cost of imported goods. Increases which food suppliers, logistics firms and wholesalers have ultimately been forced to pass onto the consumer.

With the costs of raw materials and goods leaving factories on the increase, thanks to higher oil prices and the weakened pound; rising food and fuel prices are putting pressure on firms operating within the UK supply chain.Left with a weak pound making imported goods from overseas more expensive, what effect is inflation having on consumerism and the logistics industry?

Many supermarkets have come to recognise that countless promotional product offers prove to be more of a hindrance than helpful to consumers and are often conducive to nothing but an increase in food wastage. Identifying that the increase in food and fuel prices is shaping consumers’ shopping habits, many ‘bogof’ offers have been ditched. Instead, supermarkets are in favour of offering permanent, every-day low prices all year round for consumers’ staple products.

However, more recently, due to inflation affecting the import costs of certain produce, many regular consumer items including butter, tea and a selection of fresh produce including fruit and vegetables, have risen starkly in price.

Consumers it seems are already being hit with the true cost of inflation and with budgets already spread thinly due to increased grocery and fuel expenditure, it is expected that our supermarkets won’t be the only commodity affected. Additional pressure is predicted for the sectors typically associated with consumers’ disposable income: namely retail, bars and restaurants, and travel and leisure.

Despite supermarkets offering lower priced staple-goods for now, wage growth is expected to remain weak, and looking to the future, it is consequently highly likely that consumers will be required to begin looking for cheaper alternatives as many supermarket produce prices continue to rise.

With predictions forecasting that inflation with continue to grow, the UK Supply Chain will continue to be sorely affected by ongoing increases in fuel prices, as consumers similarly will be, by the increased costs to import produce. Consequentially, it seems that thetransportation and logistics sector will for now, remain potentially jeopardised.

As we wait to see what a future UK trade agreement with Europe might look like, UK suppliers, wholesalers and manufacturers continue to face uncertainty surrounding their European distribution channels, and inflation growth, whilst households have been left strained by this Brexit-induced inflation.

 

⇐ Back to Featured Articles




Testimonials

More Testimonials

Latest News

GH Consulting to attend ILX18

  Intralogistex is coming back to the Ricoh for 2018 - The UK’s must-attend event for discovering the…

Continue Reading

GH Consulting satisfy appetite for exhibitions – at the Food and Drink Supply Chain and Logistics Summit 2017

  Hosted at the Ricoh Arena, Coventry, earlier this week – Gideon Hillman Consulting attended and…

Continue Reading

More News Stories

Featured Articles

How is Automation affecting your Supply Chain Processes

  Supply Chain Management and Consultancy is the strategic coordination of business functions within a company with the aim of achieving the most…

Changing with the Technological Times

As technology evolves, it is seen by some as an innovation, and by others, a disruption. The era of technological change within the workplace is upon us,…

Warehouse Design - what are the key factors to consider?

  When designing a new facility, our Warehouse and Distribution Centre Design Consultants have a detailed knowledge and understanding of what…

Hopelessly Devoted to Amazon?

  With predictions that more than half the world now uses a smartphone and more than half of the world’s web traffic – when paired with the…

Robots in the Driving Seat

As the Logistics Industry continues to catapult into the world of modern technology, many more processes are becoming automated, warehouse practices and…

Supply Chain Cyber Security

  October is National Cyber Security Awareness Month - an annual campaign which aims to raise the awareness about the importance of…

Ecommerce and the Shape-Shifting Retail Industry

  As more and more of our technological devices are connected to the internet, the fine-line separating shopping online and shopping in-store, is…

Top Tips to Strengthen your Supply Chain

  Supply Chain Management can be defined as the strategic coordination of business functions, with the aim of achieving the most efficient movement and…

Is your warehouse Future Proof?

Investment into a New Build Warehouse is always going to be a substantial one, regardless of the prevailing economic climate. It is the longevity of the…

5 Top tips to improve your Warehouse Operations, from Logistics and Warehouse Specialists

  Warehouse productivity is vital for warehouse managers to improve upon and maintain, however with the ever-changing digital landscape, labour,…

Gideon Hillman Consulting Limited is registered in England and Wales.
Company Registration No: 6593700. Registered office at Highdown House, 11 Highdown Road, Leamington Spa, CV31 1XT. UK
A supply chain and logistics specialist with knowledge of supply chain management, implementation project management and stock management tools

Institute of Consulting ISO 9001 UKWA Logistics Awards CMI Awards