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Food companies and retailers around the world remain in crisis

Retailers and consumer goods manufacturers around the world remain in crisis mode and expect consumer behavior to remain unpredictable in the near future, industry executives said at a conference this week in Dublin.

Since the beginning of 2020, the STOXX Europe 600 Retail EUR Price Index has lost more than a fifth of its value. The equivalent index for European food and beverage manufacturers has fallen by more than 4%.

Political tension has risen, climate change has entered “another stage of crisis,” the macro-environment has changed dramatically and the COVID-19 pandemic is not over, Carrefour Chief Executive Alexandre Bompard said tuesday at the Consumer Goods Forum’s Global Summit.

“For us as CEOs, it means the crisis is the new normal,” Bompard said. “What we have been used to in recent decades – low inflation, international trade – is over. It’s not the new world.”

A supply chain contraction has also shaken manufacturing and consumer goods industries over the past year, with shipments stuck in gridirons due to factors such as pandemic lockdowns, panic buying and sanctions imposed on Russia over the invasion of Ukraine that began in February.

Logistics giant Maersk, which transports goods for companies such as Walmart and Nike, said the cost of shipping goods has risen between 25% and 30% due to a series of inflationary pressures that “are not likely to go down anytime soon.”

Consumer goods companies should get used to the idea that “the crisis is pretty much the new normal” as they struggle with rising inflation, climate change and the global food crisis, the Head of Unilever said on Tuesday.

“The mother of all crises is, of course, the climate emergency,” he said.

The problems have contributed to accelerating inflation.

“Inflation is a dynamic, especially in Europe, that we have to start getting used to,” Ayla Ziz, Danone’s global sales manager, told Reuters before the conference.

Tobias Wasmuht, managing director of SPAR International, said the supermarket chain’s owner is trying to mitigate the impact by cutting costs and being more efficient, but warned that the increase in the value of ingredients and raw materials will be passed on to shoppers.

News Source: Reuters

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