ANYONE hoping for an immediate end to the cost crisis facing households and businesses may find they are disabused of that notion after reading the latest comments from Scotmid chief executive John Brodie.
The historic co-operative, which employs around 4,000 people through its various businesses, reported a significant fall in profits in 2022 as it felt the impact of the cost-of-doing business crisis that has followed Russia’s invasion of Ukraine, notably from the surge in energy prices.
Prime Minister Rishi Sunak has boldly claimed the UK Government will “halve inflation” by the end of the year – itself an odd claim given it is not anything he or his administration can control – but as far as Mr Brodie is concerned the pressure on business from sky-high costs is not going away any time soon.
READ MORE: Scotmid declares trading 'much more challenging than expected'
“I would say the cost pressures are still there and I anticipate they will still be there for some time to come, as businesses work through all the elements,” Mr Brodie told The Herald. “For example, we have seen commodity price inflation but labour price inflation has to come through in products, given that salary reviews are an annual thing. So, my anticipation is that inflation will continue for a period yet.”
That retailers such as Scotmid will remain under pressure for the foreseeable future may not be wonderful news for consumers. It is largely because of the steep rise in cost inflation faced by companies in the wake of the pandemic and the war in Ukraine that prices at the tills are rising at a rate not seen for several decades.
Mr Brodie said Scotmid has been striving to ease the pressure on households by offering some “fantastic offers locally in store”, and emphasised the fact that its customers don’t have to incur costs to travel to its stores because of their community locations.
But the Society may not have the same capacity to cut prices to the extent the likes of Tesco or Sainsbury’s, which last week unveiled a raft of reductions for members of its respective loyalty card schemes. Mr Brodie noted that “you have to take into context we are very different operation, particularly in small stores that we operate, and we don’t differentiate – we offer flat pricing for all our customers”.
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