How Asda is beating supply chain woes

30 November 2021

Asda has chartered its own cargo ship and increased stocks of festive products to “protect” supplies this Christmas. 

The ship, which will carry 350 containers from east Asia, will be the supermarket’s first private charter and comes in response to global freight congestion and rising prices.

The company said the ship will ensure items including festive decorations, toys, clothing and gifts will be protected, and it has “pulled out all the stops during the last few months to make sure customers can get their favourite festive products” to “enjoy the Christmas they deserve”.

Asda said it was “successfully navigating the industry-wide supply chain challenges”. It said had increased the volume of turkeys and pigs in blankets available in stores compared with last year to avoid shortages, after the British Meat Processors Association warned of Christmas shortages earlier this year. 

The company has additionally built extra stocks of festive products including mince pies, confectionery, Christmas cakes and puddings.

Retailers John Lewis, Walmart and Home Depot have already announced they are chartering ships to ensure supply.

Global shipping has been hit by extreme rises in freight rates, which in some instances have risen seven-fold.

Chartering a vessel capable of carrying 3,000 20-ft containers costs around $40,000 a day, according to the Port of Los Angeles, reported NBC News.

Meanwhile luxury fashion brand Mulberry said it was able to overcome supply chain difficulties by stocking up with raw materials at its Somerset factory. 

In its half-year results Thierry Andretta, chief executive of Mulberry, said the company had taken the “bold decision” to focus on its UK production and the company was “well placed for the festive trading period and beyond”.

Around 60% of Mulberry’s products are now made in the UK, up from about half before the pandemic, according to The Guardian.

Andretta said Mulberry had added an additional production line to its UK factory in the past year, and was likely to add another if sales continued to grow at a similar pace.

He said UK production capabilities had a strong mix of flexibility, efficiency and quality due to years of investment. He said Mulberry had mitigated shortages by stocking up on key materials and components ahead of Brexit.

Mulberry saw sales increase 34% in the six months to 25 September to reach £66m, compared with £49m in the same period in 2020, but below the £69m reported in the same period in 2019. 

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