Labour shortage will raise prices, says Morrisons
The supermarket chain said that the current shortage of HGV drivers was part of a number of factors driving some “industry-wide retail price inflation” expected during the second half of the year.
Morrisons said that the company was “working hard” to address the continued challenges of Covid-19 and sustained supply chain cost increases. However, the company has also warned that it is budgeting for minimal further direct Covid-19 costs.
This news comes as the supermarket chain has announced that it is in talks to begin an auction procedure, following recent bids from a US private equity consortium led by Fortress, and private equity firm Clayton, Dubilier & Rice (CD&R).
Andrew Higginson, chair of Morrisons, said: “Across the business the whole Morrisons team has shown commendable resilience facing into a variety of continuing challenges during the first half, including the ongoing pandemic, disruption at some of our partner suppliers, and the impact on our supply chain of HGV driver shortages. As we approach our busiest time of year, I’m confident the team will continue to rise to all challenges and keep up all the good work to improve the shopping trip for customers.”
Despite various price pressures in commodities and freight and higher HGV costs, Morrisons said that it “delivered lower prices and deflation” for its customers in the first half of the year. The company explained: “By the end of the period these industry-wide price and cost increases had become sustained, meaning deflation had transitioned to slight inflation, and we now expect these pressures to persist during the second half.”
Morrisons stated: “We will seek to mitigate these and other potential cost increases, such as any incurred to maintain good on-shelf availability.”