Retailer Ritchies warns shipping delays could see supermarket items in short supply

The boss of Ritchies warns some food and grocery items could be missing from the supermarket aisles at Christmas due to supply chain constraints, while meat prices are ‘out of control’.

Ritchies boss Fred Harrison warns of some food and grocery shortages this Christmas due to shipping delays. Picture: Aaron Francis/The Australian

The boss of one of the nation’s largest independent supermarket chains, Ritchies, has warned supermarket shelves could be missing popular imported grocery products this Christmas as disrupted global supply chains caused by the pandemic constricts supplies.

Getting some food items from overseas has been delayed by as much as two months while the growing logistics nightmare of shortages of containers and pallets have thrown the supply chain into turmoil with many suppliers losing track of their orders.

Adding to the squeeze on retailers and consumers, Ritchies chief executive Fred Harrison is also bracing for rising food and grocery prices over the next year which he suspects could see inflationary pressures across the supermarket aisle of as much as 4 per cent with red meat prices in particular “out of control” and not getting better until next year.

Mr Harrison, whose Ritchies chain has 75 supermarkets and 65 bottle shops across Australia and is one of the biggest groupings of independent supermarkets in the country, said the biggest challenge facing supermarkets now was to ensure enough stock for the peak trading period around Christmas.

“Our number one issue is going to be trying to get our shelves full for Christmas, anything from overseas is adding six to eight to ten weeks on top of the normal schedule, it is almost as if product is lost in logistics at the moment, some suppliers have lost control of where product is and when it will land. It is a bit of a lucky dip,” Mr Harrison said in an interview.

It comes as Ritchies reported a 8.8 per cent rise in revenue to $1.36bn for the year ended June 27 with net profit surging 24 per cent to $31m.

Ritchies, like many independent supermarket chains, benefited from consumers keeping close to home and visiting regional or suburban shopping strips where chains such as Ritchies are more located as opposed to the larger shopping centres.

But now Ritchies is facing a supply chain challenge and customers could see the difference on the shelf.

“So, I think it is going to be a pretty lean and mean Christmas and I think the customers will become accustomed to see more gaps on the shelves and we don’t like that, it is not good for the industry, it is not good for business and it upsets customers but it is a reality.”

Mr Harrison said there would be some food and grocery lines its stores likely won’t be able to have.

“We won’t be empty of Coke, but there will be certain lines particularly if there is import involved that will see gaps on our shelves for three or four weeks, things like oils from overseas, canned tomatoes, there are a lot of commodity goods that come from overseas that are taking far longer to get to our shores.

“I do expect that we will have issues.”

Retailers across the industry have warned of expected shortages or delays due to constrained global supply chains, shortages of shipping containers and a lack of supply of wooden pallets — the backbone of moving products — with that now on a collision course with Christmas trading.

“Pallets are a disaster,” Mr Harrison said. “I started laughing when I first heard the story and now I fully understand how serious it is with a lot of manufacturers stopping supplying, stopping the running of their plant, because they have no pallets to put the stock on.”

Recently the leading supermarket chains such as Woolworths, Coles and the independents and pallet producers such as Brambles formed a task force to work on the pallet shortage issue.

Last Christmas there were some concerns of food and grocery shortages after tough Covid lockdown rules in Victoria — a key national hub for the supermarket industry — threatened the ability of distribution centres to get enough product into the stores. That crisis was later averted as the Victorian government eased some restrictions on supermarket operations and distribution operators.

Mr Ritchie also said the sector was facing considerable inflationary pressures.

“Meat prices are out of control, to the point of how much more can it go up? I would think we are not going to see meat prices head south until early in the new year. We are starting to see a lot of inputs go up, a lot of suppliers wanting to put price increases through and we could be seeing 4 or 5 per cent increases.”

Originally published as Retailer Ritchies warns shipping delays could see supermarket items in short supply