Retail stocks have reached their lowest levels since 1983 according to the Confederation of British Industry’s (CBI) latest Distributive Trades Survey.
Stock levels in relation to expected sales hit a record low across the retail and distribution sectors, marking the fifth consecutive month in which a record low has been reached, the CBI found.
The CBI said stocks were being hit despite retail sales growing at the sharpest pace since December 2014 in the year to August.
This comes as the Co-op and Iceland warn of depleted stock levels nationwide.
Alpesh Paleja, CBI lead economist, said: “There are signs of operational challenges still biting, with stock levels reaching another record low and import penetration falling.
“Disruption is being exacerbated by continued labour shortages, with many retailers reliant on younger employees currently awaiting their jab.”
Co-op chief executive Steve Murrells has said the current shortages “are at a worse level than at any time I have seen”.
Iceland managing director Richard Walker warned the ongoing shortage of HGV drivers is threatening the store’s Christmas supplies.
“We’ve got Christmas around the corner, and in retail we start to stock build really from September onwards, for what is a hugely important time of year,” Walker told BBC Radio 4.
“We’ve got a lot of goods to transport between now and Christmas and a strong supply chain is vital for everyone. The reason for sounding the alarm now is that we’ve already had one Christmas cancelled at the last minute, and I’d hate this one to be problematic as well.”
Walker said Iceland had faced delivery cancellations for the “first time” since the pandemic began, and it was facing 30-40 such cancellations a day.
Bread supplies in particular are being hit with 100 stores a day facing delivery cancellations, he said, and the company is “struggling to replenish as we need.” Deliveries of soft drinks have also fallen by 50%.
Logistics UK has estimated there is currently a shortfall of around 100,000 HGV drivers in the UK, and it estimates around 25,000 drivers were forced to return to the EU following Brexit.
However Walker claimed the HGV driver shortage following Brexit was a “self inflicted wound” and not an “inevitable consequence” of leaving the EU. Instead, it has been caused by the “government’s failure to appreciate the importance of HGV drivers”.
He called for HGV drivers to be placed on the essential workers list, which would allow EU drivers temporary visas to work in the UK to help tackle the crisis. But he said the effects of this would only be seen after four to six weeks as they would still need to acquire the right to work, undergo PCR tests, find work and places to live.
In the meantime Walker said Iceland was increasing HGV driver pay in a bid to attract UK workers to the sector.
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