Driver shortage could push food prices higher, warn hauliers and supermarkets

Supermarkets and hauliers have warned that shoppers could face long-term higher prices for food as result of systemic changes to the supply chain.

Bosses at the Road Haulage Association have told the PA news agency the “substantial” pay rises offered by firms in need of new drivers could force supermarket bosses to pass the costs on to customers.

Hauliers have warned that there is a shortfall of around 100,000 drivers. This has been driven by thousands of European drivers leaving during the pandemic and not returning, as well as “high numbers” of workers retiring.

The average age of an HGV driver in the UK is 55.

Retailers and restaurants chains, including Nando’s and McDonald’s, have been hit by product shortages as meat packers and other manufacturers have also faced significant worker shortages.

The Government introduced a seasonal worker visa scheme in December for 30,000 workers, primarily for the summer fruit picking season, but meat processors were excluded.

Rod McKenzie, managing director of policy and public affairs at the Road Haulage Association, told PA that the shortage of drivers needs urgent Government action and firms have offered better incentives and pay deals to secure potential recruits.

Coronavirus – Fri Jul 23, 2021
Hauliers have warned that pay risers for drivers could lead to price inflation (Yui Mok/PA)

“Certainly drivers’ pay is increasing, often by quite substantial amounts,” he said.

“This in turn is a cost that will need to be passed on, and given the tight profit margins of most haulage operators that means their rates to customers will have to go up.

“In turn, this may mean more of us paying higher prices for goods, services and shopping – including food prices – going forward.”

One supermarket boss also told PA that increasing wages for drivers will result in inflationary pressure for retailers.

“Paying drivers more, in itself isn’t the solution as it is resulting in them making choices about the level of working hours and balancing reduced hours along with weekend working.

“It will also create more inflationary pressure in the sector, which no one clearly wants.

“To ease the pressure we need the Government to quickly allow us to access the EU labour market, whilst the industry must also play its part in increasing the driver pool through fast-track driver programmes and apprenticeships.”

The leading food retailer also warned that the food supply issues facing the UK are now embedded and won’t improve unless direct action in the short, medium and longer term is taken.

It is clear that driver shortage is having a material impact across the entire food supply network but it is equally clear that this is a systemic issue, which can’t be simply fixed.

“The pingdemic certainly didn’t help matters but that isn’t the main issue in play here.”

The Road Haulage Association added that the situation is “not getting better” and warned that the long period of time needed to train new drivers means Government action is needed.

“We wrote to the Prime Minister a month or two back stressing the urgency of this and haven’t heard anything since,” Mr McKenzie said.

“It feels like they want to tough it out but we it means these issues will keep going and going.”

On Tuesday, Tesco chairman John Allan and Iceland managing director Richard Walker were among retail bosses to warn that they have been impacted by a shortage of HGV drivers.

The Government has promised to streamline the process for qualifications and are encouraging more workers to get trained up.