{"id":11117,"date":"2022-07-05T07:00:00","date_gmt":"2022-07-05T15:00:00","guid":{"rendered":"https:\/\/www.rangeme.com\/blog\/?p=11117"},"modified":"2023-11-12T21:57:44","modified_gmt":"2023-11-13T05:57:44","slug":"how-to-survive-the-inflation-crisis","status":"publish","type":"post","link":"https:\/\/www.rangeme.com\/blog\/how-to-survive-the-inflation-crisis\/","title":{"rendered":"How to Survive the Inflation Crisis"},"content":{"rendered":"\n

The global inflation crisis goes from bad to worse. War in Ukraine<\/a>, lockdowns in China, and COVID-19-related supply chain disruption continue to cause problems, sending prices spiraling all around the world.<\/p>\n\n\n\n

In the U.S., the annual inflation rate hit 8.6% in May<\/a>, the highest level seen since 1981, prompting the U.S. Federal Reserve to raise interest rates for the third time this year, by 0.75 percentage points. In Europe, U.K. inflation is expected to hit 11%<\/a> by autumn, while the eurozone has seen price rises hit 8.1%<\/a>, the highest level seen since the launch of the euro. On the other side of the world, inflation is heading towards 7% in both Australia<\/a> and New Zealand<\/a>.<\/p>\n\n\n\n

Consumer-facing businesses such as consumer packaged goods (CPG) suppliers and retailers are finding it difficult to cope with surging inflation. Their own costs are rising rapidly, with inflation running particularly high in staple ingredients \u2013 wheat prices<\/a>, for example, have doubled this year. But they are nervous about passing on too much cost to customers, for whom a cost-of-living crisis is rapidly intensifying.<\/p>\n\n\n\n

CPG businesses and retailers are already seeing consumers taking action in the face of soaring prices. In particular, we are seeing a shift from branded products towards own-label purchases and value lines. In the U.K., for example, retail analyst Kantar reports<\/a> that sales of branded products fell by 1% in the 12 weeks to June 12, while own-label sales rose 2.9%, and value own-label lines jumped by 12%. U.S. analysts<\/a> report a similar trend.<\/p>\n\n\n\n

In such a marketplace, there is no escape for suppliers and retailers; every business is affected, from the multinational CPG companies to the smallest independents. And it is not just cost that worries the industry \u2013 the supply chain disruption feeding into higher inflation is so acute in some areas that it is actually causing product shortages.<\/p>\n\n\n\n

Some of those shortages have become high-profile \u2013 there is widespread concern about the supply of products such as baby formula<\/a>. But those headline-grabbing stories mask a much broader problem: in the first week of April, says analyst Datasembly, about a third of grocery products<\/a> consumers browsed were out of stock<\/a>.<\/p>\n\n\n\n

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Source: The Guardian<\/figcaption><\/figure>\n\n\n\n

In other words, the CPG sector is facing a perfect storm. Producers are struggling to source the ingredients they need for manufacturing and are paying high prices when they can get what they need. They are desperate to keep production going in order to avoid retailers going elsewhere in their categories but must decide how much extra cost they can pass on. Retailers, meanwhile, have their own challenges keeping shelves stocked \u2013 and must also make tough calls about pricing and margins as consumers struggle to pay more.<\/p>\n\n\n\n

How, then, do suppliers and retailers get through this inflation spike? Here are seven tips that could help:<\/p>\n\n\n\n