Omicron wave of the coronavirus pandemic will further push up prices in the UK in the coming weeks, the Confederation of British Industry (CBI) has warned citing extra cost of dealing with a shortage of workers created by the pandemic.
About 190,000 British companies it speaks for are currently grappling with double the normal number of employee absences. Companies reporting absence rates of around 10 to 15 percent, instead of the usual 5 to 6 percent for this time of year, CBI said.
“If that 10 to 15 percent hits 20 percent, that's when you would see businesses closing temporarily, especially small and medium-sized enterprises,” Liz Crowhurst, director of the CBI's policy unit, told FT.
Larger companies would be able to cope by hiring temporary workers, putting off non-essential work and scraping by with lower staffing as long as self-isolating workers did not rise above the tipping point, CBI said.
UK Warehousing Association chief executive Clare Bottle said some operators reported that more than 30% of their staff were off sick in the first week after the winter holidays.
Consequently, several warehouses have reduced sick pay to the statutory minimum, following in the footsteps of high-profile retailers including Morrisons, Ikea and Next.
Maxim Logistics, a company that delivers to food manufacturers, said Omicron made it harder to manage staff absences especially due to the longer self-isolation requirement for those who were not vaccinated.
The managing director said despite “juggling people around” they have seen more customers cancelling orders at short notice because they couldn’t run enough shifts.
Health secretary Sajid Javid has reduced the Covid-19 isolation period to five full days after pressures from businesses and party members.
This news comes as Tesco revealed around 13,000 temporary Christmas staff have been kept on to help cope with Omicron staff absences. Last week, Sainsbury's became the latest UK supermarket to push up the pay of its shop workers, to at least 10 pounds an hour.
British retail sales fell by much more than expected in October, according to official data that added to other signs of a loss of momentum in the economy in the run-up to the first budget of prime minister Keir Starmer's new government.
The Office for National Statistics (ONS) said sales volumes have fallen by 0.7 per cent in October. A Reuters poll of economists had forecast a monthly fall of 0.3 per cent in sales volumes from September.
The drop was the sharpest since June when sales fell by 1.0 per cent from May. A monthly rise in sales in September was also revised down to 0.1 per cent from a previous estimate of a 0.3 per cent gain.
The ONS said retailers across the board reported that consumers held back on spending ahead of the new government's first tax and spending budget on 30 October.
It also said a possible contributor to the weakness in sales were the school half-term holidays for England and Wales which typically fall within the October data reporting period but did not this year.
Sales of clothing were particularly weak in October, something reflected in previously released figures for the month from the British Retail Consortium, representing the industry, which linked the fall to weather that was warmer than usual.
The ONS said during the 12 months to October, sales volumes rose by 2.4 per cent, slowing from September's 3.2 per cent rise and weaker than the median forecast in the Reuters poll for a 3.4 per cent increase.
Slow start to Golden Quarter
Jacqui Baker, head of retail at RSM UK and chair of ICAEW’s Retail Group, described the figures as a “concerning start to the Golden Quarter” - the busiest period for retailers.
“With half-term falling later this year and relatively mild weather, consumers have put off buying their winter coats and boots. This has made it difficult for retailers to shift stock,” she said. Many shoppers appear to be holding out for Black Friday deals, which Baker predicts will lift sales throughout November.
Baker noted that despite a challenging October, there is hope for a recovery in the months ahead.
“The Budget didn’t deal a huge blow to consumers in the form of tax rises, plus interest rates continue to come down, and the American election is now out of the way, which should help with confidence and create a clear runway for Christmas spending,” she said.
Thomas Pugh, an economist at RSM UK, echoed these concerns, pointing to the timing of the school half-term as a significant factor in October's sales slump. However, he expressed optimism about the longer-term outlook, predicting that retail sales would grow through 2025 as “higher consumer incomes and rising consumer confidence … feed through into higher spending volumes.”
He added: “While headline inflation jumped from 1.7 per cent in September to 2.2 per cent in October, retail prices fell at an accelerated rate. Indeed, retail inflation dropped from -1.3 per cent to -1.6 per cent, meaning lower prices will help a rise in spending feed through into bigger increases in sales volumes.”
Silvia Rindone, EY UK&I Retail Lead, highlighted consumer caution as another key factor behind the October decline.
“The decline in sales volumes can be attributed to a decrease in consumer confidence, influenced by several factors including uncertainty surrounding the Autumn Statement, rising energy bills, and the impending costs of Christmas,” she commented.
EY’s latest Holiday Shopping survey revealed that nearly half of consumers began their festive shopping before November, aiming to spread out holiday expenses.
Rindone warned that retailers face a challenging period ahead, with upcoming labour cost increases, including changes to National Insurance and a minimum wage hike set for April 2025.
“The next few months are critical… Retailers will need to ensure they drive margin this Golden Quarter so that investments can be made in their proposition,” she said.
“As our survey found, shoppers are willing to spend if the price is right and the proposition is strong. Continuing to operate as efficiently as possible while steadily improving the experience for customers will be key. Much like the last few years, the market is getting tougher, and only those able to continually evolve will thrive.”
Shareholders in food and drink giants such as PepsiCo, Coca-Cola and Mondelez are among a group of investors calling on the sector to be more transparent about the healthiness of its sales as a first step towards taking accountability for its significant impact on public health, in a move coordinated by responsible investment NGO ShareAction, the NGO stated.
The investors include Legal & General Investment Management, Pictet Asset Management, Nest, and CCLA, who collectively manage £2.34trn in assets. In a letter delivered today (21) to the chief executives of PepsiCo, Coca-Cola, Mondelēz, Kraft Heinz, Kellanova, and General Mills, investors have called on the companies to follow the likes of Unilever and Danone in adopting internationally-accepted nutrition standards for publicly reporting the healthiness of their sales.
The investors have raised concerns that an over-reliance on sales of less healthy products leads to poor diets and sicker societies, which they claim harms economic productivity and threatens long-term business success and financial returns. The investors added that a lack of transparency hinders their ability to fully assess risks and opportunities.
“We believe that health is a systemic risk that affects the whole economy,” said Tom Sanders, Senior ESG Analyst at Nest. “The increased consumption of unhealthy products harms public health and could reduce worker productivity, creating externalities that can impact our long-term investment returns as a globally diversified investor. Food and drink companies must take responsibility in helping manage these risks by being more transparent, using internationally recognised nutrition standards as an important first step.”
The move comes amid an increasing focus by governments and consumers on the food and drink sector’s reliance on sales of foods that are high in fat, salt and sugar. Around one in eight people globally are living with obesity, including millions of children, which is projected to cost the global economy more than £3.34trn a year by 2035.
Thomas Abrams, Co-Head of Health at ShareAction, said: “It’s really encouraging to see the momentum building among the investment community to hold the food and drink sector to account for its impact on public health. By adopting a responsible investment approach to public health investors can not only manage financial risks but also help more people to enjoy healthier lives for longer.”
ShareAction and the investors are asking the food and drink companies to commit to adopting one or more of the internationally accepted Nutrient Profiling Models used to define healthy food, rather than their own in-house versions.
Freight-related crime cost the UK economy an estimated £680-700 million in 2023, when accounting for lost revenues, VAT, and insurance costs, revealed a recent report from the All-Party Parliamentary Group on Freight and Logistics.
The study, funded by the Road Haulage Association (RHA), documented 5,370 reported incidents of HGV and cargo crime across the UK last year, a 5 per cent increase on the previous year. Experts suggest that the actual figures could be significantly higher due to under-reporting. The direct value of stolen goods reached £68.3 million.
According to data from the National Vehicle Crime Intelligence Service (NaVCIS), major crime hotspots include Stafford with 138 offences, Thurrock with 103, and Warwick Services with 87. The East of England, Yorkshire and Humber, and South East regions experienced the highest concentration of incidents, with the West Midlands seeing incidents double in 2023 and Yorkshire/Humber recording a 65% increase since 2021.
Analysis reveals distinct seasonal patterns, with fourth-quarter criminal activities increasing by 56 per cent in 2022 and 26 per cent in 2023, coinciding with the Christmas retail period.
The report highlights significant infrastructure challenges, noting a national shortage of approximately 11,000 lorry parking spaces. Current facilities are operating at 83 per cent capacity nationwide, with utilisation exceeding 90 per cent in the South East, East Midlands, and East of England. The A14 Cambridge-Felixstowe route, serving Britain’s busiest port, has reached 100 per cent capacity for overnight parking.
Three-quarters of recorded freight crimes occurred in independent road parking areas or unsecured motorway service stations, with incidents at motorway services increasing by 59 per cent in 2023.
The APPG’s research indicates that rather than being opportunistic, these crimes are largely conducted by organised groups targeting high-volume routes near major ports. Small and medium-sized enterprises, which comprise 90 per cent of the sector, are particularly vulnerable to losses.
The impact on Britain’s supply chains is substantial, considering that road freight moves 89 per cent of all goods and 98 per cent of agricultural and food products. The cross-party group has proposed several measures, including the establishment of national secure parking standards, enhanced law enforcement resources, and reforms to planning frameworks to increase secure parking facilities.
The report forms part of a broader examination of supply chain security and follows the government’s allocation of £32.5 million in November 2022 for truck stop improvements, supplementing £20 million provided by National Highways earlier that year.
British Beekeepers’ Association (BBKA), which represents hobbyist beekeepers, has urged retailers to stock local honey, after a new research raised significant questions about the composition of blended honey samples imported to the UK and sold at supermarkets.
In a recent authenticity test, 96 per cent of samples of imported honey from supermarkets were found to be ‘atypical’ for honey, compared to 100 per cent of UK beekeeper samples that were deemed ‘typical’.
The Honey Authenticity Network UK (HAN UK) sent 30 honey samples for testing last month, with 24 out of the 25 jars of imported honey not meeting the required standards. All five of the samples sent from UK beekeepers passed the test, as well as one supermarket honey, which was also British honey.
The test was carried out at The Celvia research institute in Estonia, which has developed a DNA Metagenomic test in which the composition of samples is compared against a database of more than 500 genuine honeys.
Diane Drinkwater, chair of the British Beekeepers’ Association– which has a membership of nearly 30,000 beekeepers across England and Wales– said she was “disappointed, but not surprised” at the outcome of the results, adding:
“Our members are small, local producers of artisan honey. Whilst the amounts that they can produce each year will vary due to the seasonable nature of the product, our methods of extraction are unique, and each jar will have its own distinct flavour and texture,” Drinkwater commented.
“We will continue to champion the benefits of local honey in an era of increasing debate over the composition of imported honey sold in the UK”.
According to the International Trade Centre, the UK imported an average of 50,917 tonnes of honey in 2023, of which 39,405 tons were from China. Jars and bottles of honey can be bought off the shelf for as little as 69p, but often feature a blend of products from a number of different countries.
Honey adulteration can take many forms, with one of the most common methods being to bulk out honey with cheap syrups made from corn, rice and other crops.
These new results follow similar outcomes from imported honey samples in Europe, with 80 per cent of samples from Germany, 62 per cent of samples from Finland, and 100 per cent of samples from Austria failing the same test.
Lynne Ingram, BBKA Honey Ambassador and chair of the Honey Authenticity Network UK said: “It is disappointing that yet again, samples of cheap imported honeys in UK supermarkets have been found to be ‘atypical’ for genuine honey. All British honeys in the tests were found to be genuine.
“The lack of appropriate monitoring, testing and enforcement by UK government has led to the UK being flooded with cheap honey, much of it from China.
“Consumers wanting authentic honey are advised to be guided by price as very cheap honey is unlikely to be genuine; to read labels carefully and choose honeys that are not a blend. Ideally buy British honey.
“We would also call on more UK supermarkets to stock British honey.”
Wiltshire Police have arrested five people and seized more than £55,000 worth of illicit vapes, tobacco and alcohol following a series of warrants in the Broadgreen area of Swindon.
In a joint operation HMRC and Trading Standards, officers executed four warrants in Manchester Road at three stores and a property on Tuesday as part of the force’s ongoing Clear Hold Build work within Broadgreen.
The raids led to the seizure of thousands of pounds worth of illegal vapes which breached the legal capacity limit and “were for sale directly next to the counters.” Officers also seized illicit tobacco and alcohol.
Some vapes were advertised as containing more than 15,000 puffs – well in excess of the 600 puff limit for disposable vapes.
Five men were arrested on suspicion of breaching section 92 of the Trade Marks Act 1994. They have been taken into custody for questioning.
“This was a highly successful morning involving excellent multi-agency work,” Sergeant Winter, of the Swindon Central South Neighbourhood Team, said.
“Community intelligence is vital to enable us to conduct operations like this. If you have any concerns around activity going on in your community then please report it to us.”