Food price increases will continue, supermarkets warn
Food prices have skyrocketed in the past year and more increases are likely, grocery stores warned yesterday.
Supermarket chains claimed they were doing all they could to keep prices down, but that they were fighting factors beyond their control.
Retailers blamed the coronavirus pandemic and other factors for an increase in the cost of food production.
Zachary Moniz, the manager of Lindo’s, and William Cox, a director at Miles Market, said in a joint statement that the impact “will continue and cause ripples, much like a rock thrown in a lake”.
The two added: “The ongoing Covid-19 pandemic, the change in political leadership in the US and the ensuing economic policy changes, the Suez Canal blockage, the seismic shift to remote working and, more recently, the pipeline hacking are just a few of the things impacting all of us in ways never imagined.”
Figures showed that grocery store prices have risen by an average of 2.9 per cent a month in the 12 months up to March.
But the overall inflation rate fell over the period, with an average rate of -0.19 per cent.
The statement said that food production and delivery had been hit by increases in materials used in food manufacture and food packaging, along with labour shortages, transport problems and currency fluctuations.
It added: “Together, they all compress the food market and contribute to an expected surge in prices, only expected to further increase over the coming months.”
The statement said that the pandemic had hit the labour supply in the US, which had a knock-on effect on costs for other aspects of food production and importation.
Mr Moniz and Mr Cox highlighted that Covid-19 had meant more people in the US working from home and moving from towns to the countryside.
They said: “This movement has put a resulting pressure on the lumber market as remote workers build residences in the country.
“Wood used to build pallets for shipping goods are a byproduct of the lumber market, and pallet charges are being added to deliveries.
“In addition to lumber for pallets, the price of cardboard – also a wood-based product – has gone up over ten per cent.”
The statement added: “US policy decisions have led to an increase in oil prices and shortage of workers, both of which affect our grocery prices in Bermuda.
“The price of plastic packaging has almost doubled in cost with the rise in oil prices.
“Also, logistical challenges related to a shortage of available drivers to move cargo has also meant the cost of moving both raw materials and finished product has gone up significantly.
“Additionally, drought conditions are increasing feed prices for animal farms.
“With the demand for meat expected to stay strong, meat prices are the first in many price increases across the industry.
“For the first time in recent memory, we are experiencing some minor delays as shipping companies are unable to procure truck drivers to meet our delivery times.
“The increased costs of these factors among others regrettably translates to a steady increase in the cost of supplying Bermuda with all types of food products.”
David Burt said that the island’s high cost of living had to be addressed just before he became Premier in July 2017.
He added: “The next Progressive Labour Party government will focus its efforts on attacking Bermuda's cost-of-living problem.
“Our policies must reduce the cost of living across all areas, including healthcare, housing, food and electricity.”
One method to reduce food costs is to increase on-island production.
It is estimated there are about 760 acres of land available for farming in Bermuda, although only 365 acres are worked.
The Government announced plans to set up a vertical farm on the island last year.
Wayne Furbert, the Minister for the Cabinet Office, trumpeted the idea last November, claiming that Government was close to finalising an agreement with a US firm to set up a factory.
But the plan is yet to get off the ground.
Mr Furbert said that discussions were ongoing in his most recent statement on the subject.
The statement also highlighted increased inflation in the US, which fuelled price hikes on the island.
It said: “Sadly, Bermudian retailers and wholesalers have no control over both the inflation and increased costs. As much as we strive to keep the costs of food as low as possible, it is unavoidable that these increased costs will impact the retail trade in Bermuda.
“There are many factors that we really have no control over and the public needs to understand the pricing pressures that are being experienced in the industry and what that means for each of us.”
But Mr Moniz and Mr Cox said there was some hope that prices would drop in time – despite the grim picture.
They added: “It is our hope that the contributors to increased prices will be lessened over the next few months as the supply of both staffing and materials returns to normal levels.
“In addition, as the food service industry reopens globally, the mix of products required will more closely resemble the traditional industry needs and their supply will lead to decreased pressure on manufacturers, thereby bringing costs down.”
Seth Stutzman, the president of the MarketPlace supermarket chain, backed Mr Moniz and Mr Cox.
He said: “It is what we’re all hearing and seeing and feeling right now. We’re having to deal with whatever prices are coming out of the US and our job is to fight every day to get costs down.”
Mr Stutzman added MarketPlace was constantly looking for new sources for products at better rates.
He said: “We’re working hard every day to find better deals and bring better quality and value to our customers.
“We’re doing everything we can to keep prices down and have even held a lot of prices.
“We have to find ways to support our community and we understand that people are struggling at the moment.”