Foodservice giant Brakes introduced a 98p fuel charge on all deliveries at the start of the month. “Up until now we have absorbed the escalating expenditure,” said Ian Goldsmith, Brakes’ strategic planning director. “However, we can no longer absorb the costs. The small charge has been set to accurately reflect the true cost increase to Brakes.”
The company’s biggest foodservice rival, 3663, has also put up its prices, but claims the increase varies between customers.
From Monday, Palmer & Harvey McLane, the UK’s biggest wholesaler, will increase the cost of delivered chilled, frozen and non-tobacco by 0.6%, and tobacco by 0.2%. It says this is due to the 30% rise in diesel prices over the past year.
“Regrettably we are forced to pass on some of the cost pressure to our customers,” Raj Shah, P&H’s national account manager, said in a letter to customers.
However, Musgrave Retail Partners GB has cut prices by an average of 5% across 150 of the brands it sells and delivers to 1,858 Londis stores.
“The current fuel prices pose a serious challenge to all grocers’ costs,” said Scott Wharton, supply chain director of Musgrave Retail Partners GB. “Within Musgrave we are working hard to offset these rises by improving our efficiency to ensure that we don’t pass this cost on.”
Booker said it was not resorting to increases. “Some wholesalers are using diesel inflation as an excuse to whack up prices,” said Ron Hickey, Booker’s director of catering development. “Even before the latest diesel price increase, on a typical catering basket Booker was 50% cheaper than Brakes’ list price.”
Recent figures posted at Companies House reveal Brakes’ pre-tax profit fell 14.2% to £59m on sales up 10.3% to £1.81bn for the year to December 2007.