Full list of cheap products becoming costly as price hikes hit Ikea and more in Europe

Brexit: Expert hits out at 'lazy' supply chain criticism

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Companies across a variety of sectors globally have been hit hard by the ongoing supply chain crisis. Months of shipping delays have prompted prices to skyrocket and lead times for foods coming from abroad to rise, which has cost businesses more and more. Many of these businesses saw sales increases during the pandemic and in the aftermath of lockdowns, but have been unable to fully take advantage of this economic recovery because of increased pressure due to the supply crunch.

Finance leaders from eurozone nations will meet today to discuss crucial economic matters, with inflation at the forefront of the agenda.

Eurozone inflation hit its highest level in 13 years during September as the bloc battled surging energy costs as a result of skyrocketing demand and limited supply.

Headline inflation came in at 3.4 percent in September according to Eurostat, which is the highest since September 2008 when it stood at 3.6 percent.

The 13-year record came after German consumer prices surged by 4.1 percent in September, which is the highest level seen in almost 30 years.

The alarming figures have caused considerable concern, despite strong economic growth since the pandemic.

The front-month gas price at the Dutch TTF hub, a European benchmark, has risen almost 400 percent since the start of the year.

However, European Central Bank chief economist Philip Lane was quick to quiet concerns on Monday – saying the issue is a passing problem and not “chronic”.

Speaking ahead of today’s finance meeting, Mr Lane told El País: “This period of inflation is very unusual and temporary, and not a sign of a chronic situation.

“The situation we are in now is very different from the 1970s and 1980s.”

Mr Lane added: “Next year the bottlenecks will ease and energy prices will drop or stabilise.”

The ECB believes headline inflation will recede in the longer term and will likely drop below its two percent target next year.

However, until that time consumers, are feeling the brunt of the price crunch.

Surging consumer prices are impacting goods and services putting more pressure on people’s finances.

Which companies have been hardest hit by the price crunch?

Almost two-fifths of UK firms reported higher costs across their supply chains in new official data – many of which will pass this increase onto consumers.

New ONS data has shown a significant rise in the number of firms raising their prices.

In October, the percentage of firms increasing prices was reported at 15 percent, which is up four percent since the start of the year.

The construction and manufacturing industries have been hardest hit with 67 and 66 percent impacted respectively.

Most of those firms are likely to put up their prices, however, so far only a third have actually spoken about lifting prices.

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The supply chain crisis in the UK will continue into 2023 and beyond according to a broad coalition of business groups.

Leaders from a range of sectors told MPs that small businesses would bear the brunt of labour shortages and price rises that have hit swaths of the economy this year, including haulage, hospitality, food and drink, construction and autos.

Ian Wright, chief executive of the Food and Drink Federation told the House of Commons Business, Energy and Industrial Strategy Committee: “Six months ago our businesses all thought this was transitory, now every business I know expects this to last into 2023 and 2024. Every single one.”

Mr Wright said material costs have climbed by 30 to 40 percent with the global economy struggling to reopen after Covid – adding inflation in the food and hospitality sector is running at a “terrifying” 14 to 18 percent.

Ikea furniture and homeware is likely to see price rises as a result of lasting disruption to the global supply change according to the brand’s owner.

Raw materials and transportation costs have increased which has had an impact on profits.

Inter Ikea Group, the parent company of the Ikea brand, which is operated by a string of franchise businesses, said it expected challenges in its supply chain to last well into 2022.

Due to pre-tax profit falling by 16 percent in the fiscal year to the end of August, which is four percent lower than 2019 pre-pandemic levels – the company will therefore be raising prices to cope with its losses.

Several other companies have reported supply chain issues and predicted further damage and impacts.

QinetiQ, the FTSE 250 defence technology company, has said “technical and supply chain issues on a large complex programme” could cost as much as £15m in the 2021 financial year.

British homewares retailer Dunelm Group has also been severely impacted by the supply chain issues.

The company said it was not immune to the global supply chains but said it felt relatively confident that it could handle them because of high buffer stocks and relatively low demand for seasonal goods needed before Christmas.

Poundland said it was also struggling to find cost savings amid higher shipping costs.

The discount retailer said it would avoid raising prices on most products but declined to detail more about its cost savings initiatives.

Domino’s Pizza Group said it was facing “well-publicised inflationary pressures and challenging labour market” conditions.

The food company said it expects the issues to continue into next year adding it hopes to hire 8,000 additional drivers to deal with the Christmas holiday rush.

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