Steep rises in the wholesale cost of a number of key home-grown vegetables are chipping away at retailers’ margins.
The increases, most prevalent on UK-grown cauliflowers and potatoes, have been driven by the recent cold and wet weather conditions which have damaged harvests and led to a shortage of good quality produce.
Crop prices rose by 2.9% in February and are currently 28% higher than the same period last year, April’s Agricultural Price Index (API) shows.
Nisa Local retailer Kishor Patel, who owns six stores in Bedfordshire, and buys about 40% of his fresh fruit and vegetables from a local supplier, said the rises were challenging for independent retailers. “The price of some fresh vegetables has shot through the roof,” he said. “Potatoes are double what they normally are, and iceberg lettuce and cauliflower are also at some of the highest levels I have seen. Unlike the supermarkets we don’t have the capacity to negotiate a fixed price for the next six months, so we have to buy it for the higher price and take the hit to our margins.”
Other products such as asparagus, normally a key sales and footfall driver at this time of year, are in short supply.
“The whole local produce market is running about six weeks late,” Colin Woods of Amberley Village Stores in West Sussex said.
“We should have had new potatoes and spinach in by now, but we’re still weeks away. What little there is is hugely expensive. I normally sell asparagus at £10 a kilo, but I can’t buy it for less than £15. Margins are being squeezed as I’m having to remain competitive and sell at cost price.”
Horticultural consultant Peter Clarke was more optimistic. “Things will come right once the spring weather starts to pick up,” he said. “English apples and baked potatoes are likely to be smaller, and the asparagus season will be compressed, but it should sell well as demand will be pent up.”
Fresh fruit and vegetables account for the third largest driver for UK top-up shopping, according to research from HIM.
“My vegetable supplier called to tell us not to bother ordering cauliflowers as they were so expensive. We’re missing other products such as asparagus which we’d normally be selling by the bucket load. Customers do understand when you explain.”
Hambledon Village Stores, Hampshire
“The price rises on some products have been huge, and it can be quite a challenge to manage. However, the price of some products, such as Spanish strawberries, have fallen, so you can claw some margin back in other places.”
Malcolm’s Store, Coventry, Warwickshire
“We have to ensure that quality remains high as that’s what customers expect of us.”
Four Nisa Local stores in the West Midlands