Food price inflation now at 8%, warns supermarket boss
Inflation in the food sector is now running at about 8 per cent, a supermarket boss has warned.
Zach Moniz, the manager of the Lindo's Group of Companies, said that the store, which has branches in Warwick and Devonshire, was doing all it could to keep down prices, but increases in overheads could not be avoided.
He also said inventory bought at cheaper prices and which could be stockpiled over the epidemic had now been sold with new stock being bought at higher prices from overseas.
Mr Moniz said: “‘As of today, I would say inflation is near 8 per cent.
“But those changes would have only taken effect very recently — mostly all in the last month — at least for Lindo’s.”
According to the Department of Statistics, food prices in March were 4.9 per cent higher than a year earlier, with overall inflation running at 2.5 per cent as other factors brought the headline figure down.
Mr Moniz agreed with the overall inflation figure, saying that because supermarkets had been stockpiling inventory and buying when prices were cheaper, the rate of inflation was artificially low at the moment.
He said: “The Government would not have collected those numbers yet and the weight given to food items in the CPI basket could impact the number or inflation rate provided by the Government.
“Accordingly, the rate prior to this month could have been much closer to 2 per cent — except for meat products.”
According to the latest Consumer Price Index, some meat products had risen almost 30 per cent with other products such as lettuce rising 20 per cent in the past year as they could not be stockpiled.
Mr Moniz said: “Throughout the pandemic, stores and suppliers have been carrying very high levels of inventory and, as a result, we have been able to buffer or delay the effects of the inflation rate that has been seen in other places such as the US, the UK and Canada.
“However, having recently depleted those stocks, we are now receiving new shipments at new inflated costs.
“There are three driving factors that directly impact the price of goods coming into the island. The cost of the goods from the foreign supplier, the shipping costs associated with landing that product on the island and the duties applied to those items.
“Duties have stayed the same over the last year, but the foreign supplier costs and shipping costs are both increasing dramatically.
“The number one driver of inflation is the rise in the price of oil. Oil or fuel is needed to harvest goods, ship harvested goods, manufacture goods, ship manufactured goods, store goods, then ship goods to their destination.
“Additionally, labour is required every step of the way. Labour shortages have led to a rise in the cost of labour. The cost to ship and the labour costs associated have all risen dramatically and continue to rise.
“The reasons for the rise can be debated, but it is likely all are contributing — the green economic policy leading to a contraction of investment in the fossil fuel business, the war in the Ukraine, and the pandemic and the associated labour shortages across the globe are all factoring into the inflation rate we are experiencing.”
According to a recent survey, more than 60 per cent of residents are now budgeting more closely when food shopping. Mr Moniz said the store was doing all it could to keep overheads — and the cost to the consumer — down.
The Government’s Retail Sales Index for March reported that food store sales were down 6.7 per cent year over year, although it noted that the decline was partly because of increases in people going to restaurants as Covid-19 restrictions were eased.
Mr Moniz said: “At Lindo’s we continue to find new sources of supply and broaden our product ranges available to us to help mitigate the out-of-stock items and the price increases we are currently experiencing.
“We continue to land quality products and provide those items on sale — at a reduced price — in season, with Cup Match items on sale at Cup Match time, Christmas items on sale at Christmas and so on.
“We will continue to provide the three discount days offering 5 per cent on Tuesday, Wednesday and Thursday.
“And most recently we have opened a bulk store where customers can find great volume deals. We urge our customers to make use of what we have on offer to lessen the impact on the costs of their baskets.
“We may not be able to directly impact the direct driving costs above, but we can still do our best to be better than our competitors and that is something we won’t stop doing.”
Last year grocery store owners warned that prices could rise because of the Covid-19 pandemic.