Nearly three-quarters of buyers in our Reader Panel believe suppliers will try to push up cost prices in the next six months.

Confectionery, soft drinks, bread, beers, wines and spirits and frozen are among the categories in which suppliers are expected to try to hike prices, according to our straw poll of buyers from multiples, convenience groups and wholesalers.

Seven in 10 buyers had already seen attempts to push through increases. One said: “We see a mixture of inflation and deflation.”

Over the past month The Grocer has reported on price rises from British Bakeries, Rank Hovis and Heinz.

While 60% of buyers said they believed reasons for such rises were legitimate, like weather or exchange rates, there were caveats. One buyer summed up the feeling of many: “Bread suppliers will grab any opportunity to increase prices as they say the category is not profitable.

“But they only have themselves to blame if retail discounts were allowed to rise disproportionately. I am sure the increases are not just weather-related and will not be reduced when crop yields are high and prices drop.”

Others agreed:“Suppliers are very quick to pass on increases but when the market drops they do not pass on the reductions,” said one, while another added: “Even in areas where there is aggressive pricing with serious retail deflation sellers will attempt to gain increases.”

A c-store buyer said: “There is some legitimacy but there’s always an element of talking things up.”

Nearly all buyers will pass rises to consumers, depending on competitor reaction.
Siân Harrington