Co-op boss warns of price rises as stores struggle against supply chain issues

Steve Murrells, chief executive of the supermarket group, said all supermarkets are “in the middle of the storm” as shops all prepare for the busy Christmas season

The boss of supermarket chain the Co-op has warned price rises are “coming” as retailers continue to struggle against supply chain issues.

Steve Murrells, chief executive of the supermarket group, said all supermarkets are “in the middle of the storm” as shops prepare for the busy Christmas season.

Stores have been left with empty shelves in recent weeks due to the lorry driver crisis, which is being caused by a shortfall of around 90,000 to 100,000 workers.

A combination of Brexit and coronavirus is being blamed for this, with the latter sparking staff shortages and a backlog of tests.

Mr Murrells said the Co-op will look to offset cost pressures “as best we can” but warned “some of that will filter down” to customers.

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He also predicted that some shoppers may not be able to get everything they want in stores this Christmas due to the supply issues.

But he reassured that while customers “might not be able to get every size of turkey, you will be able to get a turkey for your Christmas meal.”

It comes after the Co-op, which operates 2,500 food stores but also provides funeral care and other services, reported an underlying loss of £15million over the six months to 3 July.

This is compared with a profit of £56million a year ago.

In its financial results, group said: “The unplanned supply chain challenges and ongoing COVID costs will bring greater levels of uncertainty.

“This will in turn apply pressure on our prior expected level of profitability for year end.”

Mr Murrells added: “As we continue to experience the effects of the COVID-19 crisis, it is clear that things will never be the same again.

“As a business and as a society, it is crucial that we learn from the last 18 months, particularly as we turn to the momentous task of rebuilding Britain and face into the continuing disruption to our business and our supply chains.”

The warning from the Co-op echoes similar concerns from rival supermarket Iceland just a few weeks ago.

Richard Walker, the managing director of the frozen food giant, said the ongoing delivery crisis could effectively “cancel” Christmas as shops struggle to replenish shelves.

But Tesco boss John Allan urged people not to panic-buy.

“There may be some shortages”, but people should not “over-dramatise” and panic-buy, he told the BBC.

“It’s very easy to make a drama out of a modest crisis,” Mr Allan added.