Iceland boss: Christmas at risk from HGV driver shortages and supply chain crisis – business live

It’s not just food and toys that are being affected by supply chain woes either.

Builders merchants business Grafton has warned that supply chain disruption has driven up prices of its raw materials, and predicted further problems in coming months.

In its latest financial results this morning, Grafton, which runs the Selco builders warehouse chain and the Woodie’s DIY chain in Ireland – said it saw “significant pressure” on the supply chain in the first half of this year.

There were shortages of core materials including aggregates, cement, plasterboard, treated timber, sheet materials, landscaping, steel and plastics in the first half of 2021, it says.

These shortages, particularly of core products such as timber, drove up Grafton’s costs by around 7.5% compared to the first half of last year.

And there are likely to be more problems ahead, Grafton adds.

But despite these problems, Grafton made record adjusted operating profits and profit margins for the six months to 30 June — thanks to strong demand from builders as construction recovers from the pandemic.

Christmas is at risk from the supply chain crisis unless the government adds HGV drivers to its skilled worker list quickly, the managing director of supermarket chain Iceland has warned this morning.

Speaking on Radio 4’s Today programme, Richard Walker explains that the UK faces “big shortages” of HGV (heavy goods vehicle) drivers, of around 100,000 drivers. Iceland itself is short of around 100 drivers. And he blames the government’s handling of Brexit for the problems.

The driver shortage is impacting the food supply chain on a daily basis, and leading to shortages on the shelves, Walker confirms.

Fast-moving lines such as bread are being cancelled at around 100 stores a day, meaning Iceland is selling out of bread at some outlets and struggling to replenish its stocks quickly, while soft drink volumes are down 50%.

Walker explains that the festive season is now at risk, given it takes months for retailers to properly prepare:

The simple solution, Walker explains, is that heavy goods vehicle drivers need to be added to the UK’s skilled workers list, to help get drivers recruited from overseas.

Q: So is Brexit, and the departure of a lot of drivers, responsible for the supply chain problems?

Yes, Walker replies, but it’s a “self-inflicted wound” rather than an inevitable consequence of Brexit, caused (he says) by the government’s failure to appreciate the importance of HGV drivers.

Even if drivers were immediately added to the skilled workers list, it would take four to six weeks to get them onto the road (they need to be recruited, pass ‘right to work’ check, have a PCR test, and find somewhere to live), Walker warns.

Longer term, we need to replace with UK workers, Walker adds [this is also what the UK government is pushing for].

It’s undoubtedly a tough job, and a skilled job, Walker says. Iceland is raising its pay rates at its depots, but bringing in UK workers into the industry will take time — and won’t help with Christmas.

Other possible solutions, such as bringing in the army, longer hours, bigger trucks, are just “sticking plasters”, Walker concludes.

The supply chain crisis is also hitting the UK tourism sector, as hoteliers and bar owners try to juggle a surge in holidaymakers and staff shortages.

PA Media’s Rod Minchin reports that hoteliers and bar owners have been hit by staff being taken ill with coronavirus, others isolating after being “pinged”, plus a recruitment crisis due to Brexit — and too little housing.

It meant some hotels were being forced to close rooms – while restaurants, cafes and bars were operating reduced opening hours and limiting menus — just as more people choose to holiday in the UK due to the international travel restrictions in place.

Nick Hayman, joint owner of the Fistral Beach Bar in Newquay, said there had been problems with furlough, Covid-19, a decline in EU workers and too little housing.

Hayman warned that staff shortages are acute:

He said suppliers were struggling to meet orders, due to distribution problems, and he was reducing menus as a result.

Kim Conchie, chief executive of the Cornwall Chamber of Commerce, points to a lack of seasonal workers this summer, following Brexit. Shortage of accommodation add to this labour crisis – with the boom in holiday lets meaning seasonal workers struggle to find places to stay.

Mr Conchie explained:

Here’s the full story: Tourism industry hit by Brexit, Covid-19 and surge in holidaymakers

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Britain’s supply chain crisis is deepening by the day, with retail stocks running low, supermarkets struggling to get their normal food ranges onto the shelves, and hospitality firms facing shortages.

Major retailers’ stock levels are at their lowest levels since at least the 1980s, the CBI warned yesterday, due to global supply chain disruption triggered by the pandemic and worker shortages in several key industrial sectors, compounded by Brexit disruption as the UK emerges from lockdown.

This shortage of workers and materials is worrying economists, who fear the recovery is at risk.

Andrew Sentance, a former member of the Bank of England’s monetary policy committee, warns:

Back on Monday, UK factories warned that their stockpiles of materials had hit the worst on record (since 1977), with a lack of components for the electronics industry and in plastics.

The chief executive of the Co-operative Group has weighed in, warning that shoppers will face less choice.

Steve Murrells, chief executive of the Co-operative Group, has told The Times that the current food shortages are the worst he has known, with post-Brexit migration rules and Covid-19 making it harder to get food to the shelved.

Murrells warned:

Murrells attributed the crisis to “Brexit and issues caused by Covid” — with the Co-op now retraining staff as lorry drivers in the face of an estimated 100,000 shortfall across the industry.

About 14,000 European lorry drivers left the UK last year and only 600 have returned, statistics suggest, the Times adds.

More here: Food shortages worst I have seen, says supermarket chief

With McDonalds running short of milkshakes and bottled drinks, the crisis is becoming increasingly widespread.

And if the situation keeps deteriorating, Christmas dinner staples like turkey and pigs in blankets could be at risk.

The British Meat Processors Association‘s chief executive Nick Allen says:

But could longer lorries be part of the solution? The UK government, which has resisted calls to grant temporary work visas to heavy goods vehicle drivers from the EU, believes that extra-long “eco-friendly” lorries which cut down the number of freight journeys could be on the roads next year.

But there are concerns that such long vehicles could put pedestrians and cyclists at risk.

The Telegraph explains:

Full story: Longer, ‘greener’ lorries could be rolled out on Britain’s roads next year

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