The Co-op has warned that food prices will increase and that profits will be under pressure due to the ongoing supply chain crisis which is hitting nearly all major supermarkets.
The Co-op’s chief executive Steve Murrells told PA news agency that an increase in food prices is “coming” as the UK has a severe shortage of lorry drivers.
There has been an increase in shipping costs and global commodity price rises and the Co-op are looking into how they can offset cost pressures the “best we can,” but “some of that will filter down” to the customer.
The Co-op warned that the “unplanned supply chain challenges and ongoing Covid costs will bring greater levels of uncertainty.
“This will in turn apply pressure on our prior expected level of profitability for year-end.”
Christmas is 100 days away and the supply chain is going to get worse as we approach the festive season as supermarkets are getting ready for the season.
Murrells warned some festive ranges will be affected and the Co-op “might not be able to get every size of turkey, you will be able to get a turkey for your Christmas meal.”
He added, “We’re right in the middle of the storm and everybody is trying to find a short, mid and long-term solution to this.”
The Co-op has announced a new partnership with Amazon to double their online sales by £200m by year end.
Murrells said, “Amazon wants to be a force for social good.
“But it’s a trial, customers and members will tell us whether or not we have done the right thing.”
In the six months to 3 July the Co-op reported underlying pre-tax operating lossed of £15m, compared to £56m profits last year.