The fashion in economics articles at the moment is to start by asking whether we’re going back to the 1970s. Most of the more persuasive ones then present a reason why, actually, we’re not. But there’s one particular moment of the 70s I want to channel: the 1976 film The Likely Lads, and specifically the scene where Bob and Thelma are going round the supermarket.
The film followed on from the TV series Whatever Happened to the Likely Lads, itself a sequel to the 1960s series The Likely Lads. In the later series and film, Bob and Terry are seen having to move on from living it up in their twenties during the 1960s, and instead navigating their thirties in the changed world of the 1970s: Bob and Thelma’s shopping excursion, in the early days of supermarkets as we know them today, was entirely emblematic of the changes experienced by the characters and the world they lived in.
What’s always stuck with me about that sequence is the uniformity of the shelves: they are stocked floor-to-ceiling with vast expanses of the same small numbers of brands: wide repeating patterns of the same colourful cereal or washing powder boxes. And while that’s how supermarkets started out, it’s not how we’ve become accustomed to seeing them over subsequent decades: choice has multiplied, and the shelves have become ever more cluttered with different brands and varieties. Until recently, that is: last year, we heard dire warnings of diminishing choice in the shops, and had a period of spotty gaps on the shelves as companies grappled with disrupted supply chains. So what I want to look at this week is what’s happened on that front: it might be my imagination, but it feels to me as though my regular supermarket has been offering a bit less choice, with fewer products enjoying greater expanses of shelf space. Is it my imagination, or are our supermarket shelves once again emblematic of a changing country?
I’ve been looking through what various retail trade organisations have been saying, and it’s really striking how the supply chain narrative from the months either side of the new year has vanished from their public messaging. Have they gone quiet because it’s turned out they were crying wolf, or has the whole thing just got swept up in a much bigger story of economic trouble?
Certainly last year there were plenty of dire warnings about supply chain problems stemming, at least initially, from transport problems because of a lack of HGV drivers. Andrew Goodcare of the British Independent Retailers Association warned in August: "For some time we have been hearing about concerns regarding deliveries due to a shortage drivers.” By October that was being taken as read, and his warnings were broader: "The problems extends beyond the well-publicised HGV driver shortage, with employers finding it difficult to recruit people in the distribution centres, in the shops and in effect at all points of the supply chain." Ian Wright of the Food and Drink Federation warned in September that lorry drivers were moving to better paid jobs with online retailers, and that shops were reducing their lines in order to adjust to their new logistics constraints: “What is changing now is that the UK shopper and consumer could previously have expected just about every product they want to be on a shelf or in the restaurant all the time. That’s over, and I don’t think it’s coming back.” Shane Brennan of the Cold Chain Federation observed that, ““Supermarkets are simplifying their ranges,” and, “there’s now an ever-present risk of disruption in which certain products don’t get through.” Nick Allen of the British Meat Processors Association put it more bluntly still: “[I]f you go into a supermarket now, it’s like going back to the 1990s.” So maybe not quite back to the world Bob and Thelma knew… but getting there.
What I haven’t been able to find – and if any reader knows where I might, please leave a comment – is any evidence of what’s actually happened. Is there a consumer organisation out there that has quantified choice on supermarket shelves over the last year or so? The above-named organisations haven’t released evidence of the impact of all this at the consumer end of things, but maybe they’ve had other things to worry about. And equally, they haven’t released any gushing statements thanking the Government for solving the problems. I do wonder whether the move by at least one supermarket to take its value range off the shelves, until prompted into a U-turn by Jack Monroe, was part of a simplification effort of this sort. The timing is about right.
For what it’s worth, the sector’s warnings haven’t really stopped coming, although they have got more broad-based. The Food and Drink Federation stated in February that its estimate last summer of half a million vacancies in the ‘farm to fork’ supply chain is now likely an underestimate, as all sectors appear to be reporting growing vacancies. The FDF’s Ian Wright has not been shy about attributing the shortfall principally to European workers returning home after Brexit, compounded by the Covid-19 pandemic. The same warnings continued into March.
Has the Government acted? Apparently, yes. It put former Tesco CEO Sir David Lewis in charge as a ‘tsar’ (a bit New Labour - funny how the term has endured), working with Steve Barclay as all-round ministerial troubleshooter, and his efforts appeared to involve a selection of targeted interventions that owed as much to data and intelligence as anything else. With many of the key companies sharing data with the Government, I’m inferring its role became a co-ordinating and liaising one, spotting looming problems and prompting industry efforts to head them off. Bigger or more lasting policy interventions were few: the visa scheme for butchers appears to have attracted few new workers, while the first output from the HGV skills bootcamps can only be just getting to work now at the absolute earliest, as the courses are 16 weeks long (but free to take – anyone know whether this scheme has been successful?).
Possibly the supply chain issues are now effectively being managed through a combination of reduced lines in supermarkets and ongoing government vigilance to head off problems before they get serious. But I’d be fascinated to know whether there is any work to show whether or not we have indeed endured a significant reduction in consumer choice as a consequence of Brexit.
However, for all that it’s an important and interesting detail, the fall-out from those supply chain issues probably isn’t the big story any more. It certainly appeared to be feeding into inflation around the turn of the year, and the British Retail Consortium has still been listing transport prices this month among the reasons for price increases. But spiking energy and food prices as a result of Russia’s invasion of Ukraine look like being much bigger drivers of the current rise in inflation. The consequences of the war may well be even bigger than we have been hearing so far, with massive disruption to global fertiliser supplies disrupting agriculture worldwide. All told, the shift of attention from slightly less diverse supermarket shelves to mounting problems with the global food supply could well eminently justified.