Britain's supply chain crisis laid bare: One in four food outlets, one in four supermarkets and more than one in five manufacturers have been hit by low stock levels amid driver shortage
- ONS says 27% of food services and accommodation firms have reported lower than normal stock levels
- Low stock levels also reported by 23% of manufacturers and 25% of firms in the wholesale and retail trade
- Mounting supply chain crisis is increasingly leaving shelves bare and leading to a shortage of materials
- Greggs, McDonald's, Nando's, KFC, Beefeater and Subway have all warned customers about shortages
More than a quarter of food and hospitality firms have been hit by low stock levels in recent weeks as Britain's mounting supply chain crisis takes its toll and stores struggle to replenish shelves with essential goods.
The Office for National Statistics revealed today that its recent business survey found 27 per cent of food services and accommodation firms have reported lower than normal stock levels - the worst-hit of all the sectors.
Low stock levels were also reported by 23 per cent of manufacturers and 25 per cent of firms in the wholesale and retail trade, repair of motor vehicles and motorcycles industry between July 26 and August 8.
It comes amid a mounting supply chain crisis, which is increasingly leaving supermarket shelves bare and leading to a shortage of materials and higher prices across a raft of sectors, from housebuilding to car production.
Greggs said this week it has been unable to restock products in some stores, joining McDonald's, Nando's, KFC, Beefeater and Subway in warning customers about shortages of key ingredients and products.
The escalating delivery driver shortage is now even threatening Christmas, with bosses at Iceland and the Co-op revealing this week that cancelled deliveries are causing the worst gaps on shelves they have ever seen.
A shopper walks past a sign advising that products are out of stock at a Sainsbury's in Nine Elms, South London, on July 22
This stock advisory sign was spotted yesterday by a Greggs customer at the bakery chain's outlet in Winsford, Cheshire
The supply of popular Christmas products is likely to be hit by domestic labour shortages and issues with global shipping
| SECTOR | Yes, the businesshas been able to get the materials, goods or services it needed | Yes, but the business had to change suppliers or find alternative solutions | No, the business has not been able to get the materials, goods or services needed | Not applicable |
|---|---|---|---|---|
| Manufacturing | 51.4% | 18.4% | 5.8% | 24.5% |
| Construction | 42.1% | 16.5% | 15.4% | 26.0% |
| Wholesale and retail trade;repair of motor vehicles and motorcycles | 45.9% | 12.5% | 10.8% | 30.9% |
| Accommodation and food service activities | 46.2% | 11.4% | 9.0% | 33.4% |
| All businesses | 35.6% | 8.9% | 7.1% | 48.4% |
| Office for National Statistics - Intra UK procurement, businesses not permanently stopped trading, weighted by count, UK, to July 26 to August 8 2021 | ||||
The latest ONS fortnightly business poll revealed that firms across the UK have been struggling to get hold of materials, goods and services.More than one in seven construction firms - 15.4 per cent - said they have not been able to get the materials they need in recent weeks, while 9 per cent of hospitality firms also reported the same issue.
Nearly one in five manufacturing firms - 18.4 per cent - have had to change suppliers or find alternative ways to get materials, goods or services, with 16.5 per cent of construction firms and 11.4 per cent of food and hospitality companies reporting the same, according to the ONS.
It found less than half of builders and hospitality firms said they had been able to source all the materials, goods and services they needed without issues - at 42.1 per cent and 46.2 per cent respectively.
Just over half of manufacturers - 51.4 per cent - said they were able to get hold of the materials and goods they needed in the survey between July 26 and August 8.
The UK's largest housebuilders have been reporting increased prices of vital materials such as cement and steel in recent weeks.
Grafton - the owner of builders materials supplier Selco - revealed yesterday that shortages of core materials due to supply issues had pushed up prices by around 7.5 per cent year-on-year in the first six months of 2021.
A lorry driver shortage in the UK is adding to post-Brexit disruption and worldwide material supply problems caused by the pandemic.
The ONS's survey also showed the rising impact of the lorry driver shortage on the haulage sector, with the transportation and storage industry seeing nearly a fifth of firms – 18 per cent - having paused or stopped trading in mid-August.
This was largely driven by the freight transport by road industry and the unlicensed carriers industry, the ONS said.
Meanwhile, the chairman of Tesco has warned of some festive product shortages at Christmas, which could include gammons and pigs in blankets.
Deliveries of bread, milk and fresh produce to supermarkets and convenience stores have been disrupted, while supplies of canned and bottled drinks are rationed in some areas.
Haulage and retail industry leaders say the UK has a shortage of 90,000 to 100,000 drivers and they are calling on the Government to take urgent action amid fears that crucial Christmas deliveries will be disrupted.
Disappointed diners are turned away at Nando's in Bradford, West Yorkshire, on August 17 as it suffers from supply shortages
Fast food chain McDonald's had to pull milkshakes and bottled drinks from its menu earlier this week as it battled against supply problems amid a shortage of lorry drivers. Pictured: People walk into a McDonald's outlet in London on Tuesday
Richard Walker (left), the managing director of Iceland, and Co-op's chief executive Stevel Murrells (right), are among those who have raised the alarm about a supply chain crisis caused by a perfect storm of Covid and Brexit
They argue that HGV drivers should be added to a list of essential and skilled workers so people from the EU can be given visas and allowed into the country to keep food on plates.
He warned the delivery disruption is 'impacting the food supply chain on a daily basis'.
He said: 'Things like bread and other fast moving lines are being cancelled in about 100 stores per day, soft drinks are 50 per cent less in terms of volume. So it is having an effect at shelf.' Mr Walker admitted that some stores are selling out of bread and then struggling to replenish the shelves.
'We have a lot of goods to transport between now and Christmas and a strong supply chain is vital for everyone,' he said. 'The reason for sounding the alarm now is that we have already had one Christmas cancelled at the last minute, and I would hate this one to be problematic as well.'
Industry experts say the shortage is largely the result of a double-whammy of Brexit, which led to thousands of EU drivers going home, and coronavirus.
Lockdown hit the training of new drivers and some 40,000 HGV driver tests were cancelled.
Significantly, the average age of a British lorry driver is put at 56-57 and not enough young people have joined the industry against a background of long hours, unattractive conditions and poor pay.
Mr Walker told the BBC's Today programme yesterday: 'It is a self-inflicted wound caused by the Government's failure to appreciate the importance of HGV drivers as skilled workers.
'On the skilled worker list are ballerinas and concert orchestra musicians, but not HGV lorry drivers — so let's add them. It's criminal that they are not on the list.'
Tesco chairman John Allan backed the idea of giving EU drivers visas to help keep Britain moving. 'The best and most straightforward solution would be for the industry to bring in skilled drivers from elsewhere,' he said.
Looking ahead to Christmas, he said: 'We are running very hard just to keep on top of existing demand and there isn't the capacity to build the stocks we would like to see.
'So in that sense I think there may be some shortages at Christmas. But again I wouldn't want to over-dramatise the extent to which that would be the case.'
Steve Murrells, chief executive of the Co-operative Group, said the ongoing food shortages 'are at a worse level than at any time I have seen'.
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