Cooking oil shortages lead to £18m in lost sales

21 June 2022

Russia’s war in Ukraine has resulted in over a fifth of normal cooking oil supplies being out of stock in the UK, leading to millions of pounds worth of lost sales.

The UK faced lost sales of £18m following shortages of cooking oil, while France saw lost sales of €57m, according to consumer data company NielsenIQ.   

The war has caused the wholesale cost of sunflower oil to increase by around 1,000%, as around 70% of global sunflower oil supplies are produced in Russia and Ukraine.

In the UK the out-of-stock rate was 22% while in France it stood at 25%, according to the data, which covered 1 January to 22 May.

Dan Sutton, analytics manager of retail collaborative solutions at NielsenIQ, said: “Not only can retailers lose significant sales as a result of out-of-stocks, but it also results in reduced customer satisfaction and lower loyalty levels.

“Our research shows that 30% of shoppers will visit a new store when they can’t find what they’re looking for and 70% will buy a different brand when their regular choice is out of stock.”

The research found in France, Spain and the UK approximately 4% of FMCG products were out of stock and they remained so for an average of four days.

Sutton continued: “While a 4% out-of-stock rate might seem small, the value in missed sales this represents is huge. The 4.4% out-of-stock rate in France resulted in €851m in missed sales, while in the UK this 4% figure represents approximately £1bn in missed sales.”

The UK Food and Drink Federation (FDF) warned the war had resulted in “substantial rises” to food ingredients. 

It said: “Between June 2020 and January 2022 global food prices rose by 23% but between February and May of this year, after the war started, they rose by a further 31%.

“Such significant rises over a short time span will mean that manufacturers will try to absorb some of these increases at the cost of foregone investment, potentially hurting the longer-term growth of our sector.”

Karen Betts, CEO of the FDF, said the UK's food supply chain disruptions were being further exacerbated by persistent labour shortages. 

Betts said: “The industry still faces significant and stubborn labour shortages across a variety of roles from warehouse operators to engineers. These shortages, which are forcing some companies to suspend some production, are hampering growth and contributing to rising costs. 

“Many businesses are looking to invest more in advanced technologies as a result but the uncertain economic outlook and the range of upcoming, complex government regulation is holding them back.” 

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