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

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

Greggs

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 

Businesses reveal whether they could get the materials, goods or services they needed from within the UK in last two weeks
SECTORYes, the businesshas been able to get the materials, goods or services it neededYes, but the business had to change suppliers or find alternative solutionsNo, the business has not been able to get the materials, goods or services neededNot 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 motorcycles45.9% 12.5% 10.8% 30.9% 
Accommodation and food service activities46.2% 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.

Skills shortages around the world push up wages as hiring bounces back

Recruitment company Hays has warned over 'clear signs' of skills shortages worldwide and said the hiring woes are pushing up wages in some hard-hit sectors.

The firm said salaries are rising in certain industries as employers seek to attract and retain staff, particularly in the technology and life sciences sectors.

It comes as businesses in the UK are resorting to offering large cash bonuses to attract recruits, with it emerging earlier this week that Amazon is paying £1,000 'golden hellos' to new warehouse workers.

The shortage of lorry drivers in the UK is also seeing firms pay hefty joining bonuses. Rival recruitment firm Robert Walters recently said salary hikes of up to 30 per cent are 'commonplace' for some hard-to-source roles across the UK.

Hays chief executive Alistair Cox said: 'Across all our regions there are clear signs of skill shortages and wage inflation in certain industries, particularly technology and life sciences.'

Hays' comments came as full-year results showed a rebound in recruitment demand, with the group saying it expects to recover to pre-pandemic profits faster than previously thought. It posted a 2 per cent rise in pre-tax profits to £88.1million for the year to June 30, with growth ramping up in the second half.

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

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

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, the managing director of Iceland
Co-op chief executive Stevel Murrells

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.

Now ONLINE deliveries could be hit by lorry driver shortage: Fears for Asos, Argos and other orders after Yodel and DHL driver unions threaten strike action over pay amid supply chain crisis 

Online shopping deliveries from Asos, Argos and others could suffer amid the lorry driver shortage after drivers for Yodel and DHL threatened strike action over pay.

A consultative poll of 200 drivers working for DHL saw a 98 per cent vote for industrial action over the offer of a one per cent pay rise.

It will now go to a full ballot of members by the Unite union who recently won a higher pay rise for beer delivery drivers after a threatened strike which was subsequently called off this week.

A nationwide shortage of HGV drivers has put those in the trade in a stronger position when it comes to negotiating new pay deals.

It comes as lorry drivers at delivery giant Yodel are being balloted on whether to take industrial action over pay and conditions. The GMB union said more than 250 of its members will vote in the coming weeks on whether to launch a campaign of action.

The action is being taken at the Sainsbury's distribution centre in Dartford, Kent, where deliveries and operations are run by logistics giant DHThe managing director of Iceland, Richard Walker, said it is 'criminal' that drivers are not eligible for these visas, yet they are available to visiting ballerinas and concert pianists.

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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