Statement on Food Price Increases Massy Stores (SLU)
Statement on Food Price Increases
Massy Stores (SLU)
April 14, 2022
In June of 2020, in the middle of the COVID-19 global pandemic, Massy Stores (SLU) informed the public of the myriad of challenges which the unusually high demand for various products was having on the global food supply chain. Massy Stores’ core business is supermarket retail and much of what the company sells is imported. As such the company noted the impact of this global demand on food prices, which were already increasing at that time. The company used the opportunity to advise the public that there could be more price increases in the future, given the extent of the supply chain challenges and the elevated demand for goods.
Some of the main pain points from the start of the pandemic worsened in 2021, and with them came more price increases from suppliers, some almost weekly. These continued price increases are a direct result of many factors affecting the ability of manufacturers to produce goods and services and to meet the rate at which these are being demanded. Some of these factors include insufficient raw materials, high cost of raw materials and labour shortages. This was further compounded by increases in shipping, freight and other costs associated with getting products to their respective destination and constant delays with transit of products due to port backups.
This situation is not a Massy Stores or St. Lucia specific issue, as supermarket retailers across the globe and businesses in other sectors are facing the same supply and price challenges.
Martin Dorville, Manging Director of Massy Stores explains that retailers are at the end of the supply chain and, in large measure, price takers. Therefore, the situation which has unfolded over the last two years has brought with it very little room to negotiate and little to no control over the rate at which supplier prices are going up.
“No geographic space has been spared the challenges of COVID-19. While we have been very prudent (since May 2020) in absorbing much of the supplier price increases in part and in some cases totally, the situation spiralled in 2021 and beyond, to the extent where it is no longer possible to do so, without seriously affecting the viability of the business” says Mr. Dorville.
With the war in Ukraine, the situation has worsened. Russia and Ukraine are among the world’s main breadbaskets, accounting for a huge share of the world’s exports in several major commodities, including wheat, vegetable oil and corn. The prices of these commodities, which are base ingredients in many products, reached their highest levels ever, in March this year. The UN Food and Agriculture Organization (FAO) said “its Food Price Index, which tracks monthly changes in international prices for a basket of commodities, averaged 159.3 points last month, up 12.6 percent from February”. This is predicted to have primary and second order impact on the price and availability of key consumer staples and food production products. The rise in oil prices which the war has provoked is also increasing transport and production costs, while the conflict has already begun to disrupt shipping world-wide.
Amid these constantly evolving challenges, which are greatly impacting overall business costs and prices of products across a range of categories, especially food, Massy Stores SLU continues to work diligently to find solutions and ways of bringing food to the St. Lucia market at affordable prices.
Mr. Dorville says, “We are focused on working closely with our suppliers, both local and international, to ensure we can maximize order fulfilment, while looking for more deals and opportunities, where possible, to help alleviate the pressure on customers during this difficult time. We also continue to search for value brands that will give our customers lower cost options. Importantly, our relationships with farmers and local manufacturers who supply our stores have also been enhanced. We remain grateful that our customers continue to make us their supermarket of choice. We are resolved to maintaining an adequate supply of good quality, wholesome food products for the nation and providing them at fair market prices to customers.”
Massy Stores SLU remains committed to observing and ensuring the highest ethical standards in all business activities and adhering to all government regulations that govern business operations in St. Lucia.
As the country goes through this very challenging time in its history, an area of priority for Massy Stores SLU is continued investments in programmes that benefit the agricultural sector (especially farmers) that promote food security and environmental sustainability.
“We continue to care about what happens to this nation during this crisis and we are in for the long haul.”