“Approaching storm clouds” on the horizon – Coral Rose
The sun has been shining all summer and foodservice wholesalers have been loving every second, but as FWD Chair, Coral Rose, says, a heatwave is normally followed by storm clouds – and there’s a few of those gathering
If you could prescribe a remedy for two years of acute pain in some parts of the wholesale channel, an extended heatwave in the first summer after the full lifting of Covid restrictions would be high on your list.
The glorious weather has been exactly the catalyst that was needed to unlock the savings that many households built up over the pandemic and give everyone the opportunity to properly enjoy themselves while the sun shines. Wholesalers are reporting their best year for years, although when you consider the journey some of them have been on since 2020 – and with the public clearly enjoying some much-needed indulgence – perhaps that’s not as surprising a claim as it might seem.
We have to marvel once again at FWD members’ ability to rise to any challenge, whether it’s crazy high temperatures or crazy high demand, and overcome the lingering availability and labour challenges to meet customers’ needs. Nothing stops the stock getting to where it’s wanted, not even the kind of heat that melts tarmac. It’s an amazing service that wholesalers’ teams pull off every single day, whatever is thrown at them – and it needs to be applauded more loudly.
All heatwaves come to an end eventually and often with a downpour. Throughout the summer there’s been an awareness of approaching storm clouds, but it’s been a distant rumble. We know what 10% inflation will do and we know that some of our operating costs are already rising by an awful lot more than that. The proportion of the population who have had the desire and the means to carry on as normal must have been aware that shelf and menu prices have been creeping up, but decided they didn’t need to act immediately. Well, maybe soon they will have to.
Hospitality, in particular, is likely to feel the chill as winter approaches, with the obvious knock-on for those who supply those businesses. That’s why FWD has got on the front foot and delivered a food supply manifesto to the new Prime Minister. We’ve outlined what we believe are practical and effective measures that can be taken immediately to support food supply into local stores, restaurants and pubs, but perhaps even more importantly, into vital services such as schools, care homes and hospitals.
We have called for a cut in fuel duty, an effectively cost-free option for government given the rise in duty revenue it has gleaned from months of surging oil prices. Specifically for hospitality, we’d like to see a cut in VAT, another simple but massively effective way to preserve the profitability of hundreds of thousands of small businesses which provide jobs, service and choice in neighbourhoods, villages and remote communities throughout the country.
Perhaps most pressing is our call for greater investment in food supply to public sector contracts, especially free school meal provision. Government support for these vital services had already stalled long before the recent surge in inflation and as it stands, the cost of delivering food to these institutions is becoming such a burden on wholesalers and caterers that something has to give. It could be the nutritional quality of the food served or the portion sizes. It’s even possible that smaller operators might have to walk away when contracts expire because with increasingly stringent nutritional and sustainability requirements – and no further support to help meet them – it’s costing them money to continue the service.
The likelihood is that the next Prime Minister will be an avowed cost-cutter, a devotee of tax cuts and small government. There are plenty of entrepreneurs in our sector who will welcome that opportunity to invest and we would ourselves welcome some de-regulation, or at least a pause in introducing new legislation that would place an even great financial strain on our members.
The bottom line is; if we’re heading into an economic storm and a new administration is determined to steer us through it through cuts in public spending, there may be areas where it can achieve that aim. But food distribution is not one of them.Coral Rose cost of living crisis economy Foodservice FWD heatwave transport Ukraine crisis Wholesalers