Category Archives: Supply chain crisis

Next cheers retail sector with bumper profits and talk of falling prices

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Shares hit new high as chain says consumer backdrop is improving and ‘feels like it is now entering a new era’

Next said the prices it charges customers are falling this year, as the fashion and homeware retailer reported bumper profits and said the UK consumer backdrop was improving.

Simon Wolfson, the group’s chief executive, said that it had been “a long time” since the group had started a financial year in such a positive frame of mind after the positive sales and growth results for the year to January.

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Ikea warns Red Sea attacks could disrupt supplies and deliveries

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Firm says it is weighing up options to secure product availability amid Yemeni rebel attacks on shipping

Ikea has warned that the disruption to global trade caused by Yemeni rebel attacks in the Red Sea could delay its deliveries and affect availability of some products.

The world’s largest furniture company said it was “evaluating other supply options to secure the availability of our products” after many big shipping companies stopped sending vessels through the Suez canal in response to the attacks by Houthi militants’ protests against the Israel-Gaza war.

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Primark owner upgrades profit outlook as inflation fuels jump in sales revenue

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Associated British Foods says group sales rose by 16% with Primark saying rises supported by steeper prices

The owner of Primark and food brands including Twinings has upgraded its profit forecast for this year as sales revenue jumped thanks to inflation-fuelled price increases and as shoppers bought summer clothes.

Associated British Foods, which also owns brands including Ovaltine as well as a sugar business, said that group sales rose by 16% to £4.7bn in the three months to 27 May. Sales at Primark were up by 13% to nearly £2bn.

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Bike maker Brompton to source fewer parts from China and Taiwan

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UK company makes decision because of growing tensions between Beijing and the island

Brompton, the UK’s largest bicycle maker, has said it is planning to reduce its dependence on China and Taiwan for parts, amid fears of a growing military threat to the island from Beijing.

The company known for its folding bikes is among various western firms hoping to ensure they can source supplies from other countries, as concerns mount over rising geopolitical tensions, and even a possible future invasion of Taiwan by China, which considers the island to be a breakaway province.

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China’s move to ease Covid travel restrictions lifts hopes for global economy

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Analysts says lifting of many rules may soften impact of higher interest rates and unblock supply chains in 2023

China’s decision to ease rules on travel in and out of the country, the world’s second-largest economy, has offered investors hope that it could soften the toll from higher interest rates on global stock markets and unblock supply chains amid a dark outlook for 2023.

Chinese authorities said late on Monday that inbound travellers would not have to quarantine on arrival, from 8 January onward. The announcement marked the latest in a series of steps to reopen the country, which is home to vital global supply chains and 1.4 billion people.

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Zero-Covid policy is costing China its role as the world’s workshop

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Beijing’s endless lockdowns are causing shortages for western firms such as Apple, and it may not be long before they move their supply chains elsewhere

The anti-lockdown unrest gripping China has forced the authorities in Beijing to respond by easing some restrictions in big manufacturing centres, as they map out a “new stage and mission” in the country’s deeply unpopular zero-Covid policy.

There are concerns that more freedom of movement could allow the virus to rip through a population where immunity is lower than in the west. Those health risks mean the “world’s workshop” is heading for a difficult winter, casting a shadow over the prospects for international trade.

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EasyJet looks to over-45s in cabin crew recruitment drive

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Airline launches campaign targeting ‘empty nesters’ or people looking for challenge later in life

The airline easyJet has launched a recruitment drive urging people over the age of 45 to join its cabin crews, as firms devise new strategies for hiring staff in the UK amid a shortage of workers.

The airline said it has seen a 27% increase in crew aged 45 and over in the past four years, including a 30% increase in over-60s in the past year.

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Lively guinea pig and giraffe toys flagged as ‘Christmas bestsellers’

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Toy Retailers Association selects likely ‘must-haves’ for British market with eye on strained budgets

An interactive guinea pig which has babies and a “booty shaking” disco giraffe are predicted to be among the bestselling toys this Christmas as retailers battle for custom with toy ranges tailored to suit “every budget”.

With the cost of living crisis looming large, the DreamToys list drawn up by the Toy Retailers Association (TRA), features a selection of cheaper toys this year, with eight of the top 12 under £35. The cheapest item on the list is an £8 Squishmallow, a cuddly toy expected to be a popular stocking filler.

Barbie Cutie reveal doll £33

Gabby’s Purrfect Dollhouse £80

Goo Jit Zu figurine £11

GiGi the Giraffe £28

Mama Surprise £65

Magic Mixies Mixlings Magic Castle £30

Paw Patrol Big Truck Pups vehicle £18

Pokémon Elite Trainer set £42.50

Rainbow High fashion doll £32

Sink N’ Sand game £20

Original 7.5in Squishmallows £8

Lego Star Wars Hoth AT-ST £45

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Plans for eight-day strike at Felixstowe threaten UK supply chain

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Owners prioritise multimillion-pound shareholder dividends over paying decent wages, says union

Dockers at Felixstowe are planning eight days of strike action over pay that could cause serious disruption to the UK’s largest container port.

Nearly 1,900 workers plan to stop work for more than a week at the Hong Kong-owned port, starting on Sunday 21 August and ending on Monday 29 August, according to the union Unite. The workers voted 92% in favour of strike action last week.

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UK factory growth slows to weakest in 18 months as business optimism falls

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Supply bottlenecks, cost pressures and softer demand hit British industry

Growth in UK factories’ order books and output has slowed to its weakest in 18 months as cost pressures, supply bottlenecks and softer demand hit British industry.

The latest update on manufacturing from the CBI found business optimism fell for a third quarter running amid signs that the strong expansion of the past year has come to an end.

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South Korea truckers’ strike threatens to disrupt computer chip production

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Stoppage by drivers is preventing the flow of key components in the tech industry and could add to global supply chain problems

A week-long strike by truck drivers in South Korea threatens to be the latest bottleneck in the global supply chain after industry bosses warned that the production of computer chips across Asia faced disruption.

With the worldwide flow of goods struggling with hurdles such as lockdowns in China and the war in Ukraine, Tuesday saw the first concrete sign that the strike was affecting South Korea’s world-leading semiconductor sector.

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Global supply chain crisis fuels push to local manufacturing as China’s appeal dims

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Analysis: US to examine with fresh urgency easing reliance on China as pandemic disruptions expose global economic vulnerabilities

Everyone has a story to tell about the supply chain problems that have affected the global economy, from the beginning of the pandemic through to the disruption caused by the war in Ukraine. From shortages of Ikea furniture and Christmas turkeys, to the dearth of computer chips that sent the cost of secondhand cars soaring, the dislocation of a once smooth-running system has caused havoc in the global economy.

But while predictions about the easing of bottlenecks have come and gone without any improvement, it has become clear the disruptions of the past two years or more are spurring fundamental changes to the world economy that could have yet more profound impacts on our lives.

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Most small firms fear long-term fallout from UK’s cost of living crisis

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Half worry rocketing prices will cut spending, while three in four fear long-term damage to businesses

Three-quarters of small and medium-sized companies are worried about the long-term impact the cost of living crisis, soaring energy bills and rising inflation will have on their business, a survey has found.

Just over half (51%) of SMEs said they were concerned that rocketing prices would dent consumer spending, in response to Barclays’ SME Barometer, a quarterly survey of business sentiment conducted for the bank.

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Lithuania wants naval coalition to lift Russia’s blockade of Ukraine’s grain

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Countries affected by loss of crop from Ukraine could help escort ships, says Gabrielius Landsbergis

Lithuania has called for a naval coalition “of the willing” to lift the Russian Black Sea blockade on Ukrainian grain exports.

The Lithuanian foreign minister, Gabrielius Landsbergis, proposed the plan during talks with the UK foreign secretary, Liz Truss, on Monday in London.

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Ukraine farming group calls for urgent end to ports blockade

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Group warns of ‘cascade of export bans’ amid failure to ease grain bottlenecks fuelling shortages and inflation, MHP said

One of Ukraine’s largest farming groups has called for an urgent solution to unblock the country’s Black Sea ports as exports of grain, sunflower and rapeseed are being held up by the Russian naval blockade, driving inflation and shortages around the world.

G7 ministers have held urgent talks about trying to open routes through Romanian and Baltic ports, potentially fed with an army of 10,000 trucks making a five-day trip from Ukraine.

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Will China’s zero-Covid policy bring the world’s factory grinding to a halt?

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Huawei executive warns of ‘massive losses’ in tech sector as tensions rise over strict lockdowns

A top Huawei executive has broken ranks to warn that China’s stringent zero-Covid policy may trigger “massive losses” for the tech industry, putting the country’s economy as well as the global supply chain at greater risk.

“If Shanghai cannot resume production by May, all of the tech and industrial players who have supply chains in the area will come to a complete halt, especially the automotive industry,” Richard Yu Chengdong, head of Huawei’s consumer and auto division said in a WeChat post. “That will pose severe consequences and massive losses for the whole industry.”

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The rise in global inflation – the hit to living standards across the world

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Analysis: From Pakistan to the US, Australia to Germany, the cost of living is rising to new highs and causing new hardships

After decades lurking in the shadows, inflation is back. On Amazon, you can find fridge magnets printed with words spoken 40 years ago by Ronald Reagan, before the election that swept him into the White House.

“Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hit man.”

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Brexit changes will add to soaring costs in 2022, warn UK manufacturers

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Make UK says two-thirds of companies fear customs delays and red tape from new rules will further hamper supply chains

Manufacturers have warned that Brexit will add to soaring costs facing British industry, amid concerns that customs delays and red tape will rank among the biggest challenges for firms this year.

Make UK, the industry body representing 20,000 manufacturing firms of all sizes from across the country, said that while optimism among its members had grown, it was being undermined by the after-effects of the UK’s departure from the EU.

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Asia’s factory workers at the sharp end of the west’s supply chain crisis

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Migrant workers ate and slept in factories swarming with Covid, sealed off from outside world

For weeks, Hoang Thi Quynh* worked and slept inside a garment factory in Tien Giang province, in southern Vietnam. She would start her shift at 7.15am and then, after a day spent sewing sportswear garments, enter an empty hall of the factory complex and settle down for the night.

Each worker had a tent, set one or two metres apart, containing a foil mat, pillow, blanket and a box to store their belongings. No workers were permitted to meet anyone from outside the factory; even speaking to a visitor over the gates was forbidden.

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Apple may cut iPhone 13 production by millions as US warns of Christmas shortages

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Shares in Apple fall as global chip shortage and supply chain issues prompt White House to admit there could be empty shelves during festive season

Apple may slash the number of iPhone 13s it will make this year by up to 10m because of a shortage of computer chips amid a worldwide supply chain crunch that led the White House to warn that “there will be things that people can’t get” at Christmas.

Apple was expected to produce 90m units of the new iPhone models this year but has told its manufacturers that the number would be lower because chip suppliers including Broadcom and Texas Instruments were struggling to deliver components, Bloomberg reported on Tuesday.

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