Manufacturers warned off ‘having a go’ at prices rises

In this exclusive video interview, Shore Capital’s director and head of research Clive Black told FoodManufacture.co.uk: “If the consumer is at the forefront of manufacturers’ thinking and if the consumer insight is good and a strategic approach is undertaken, then cost recovery can be achieved and there can be a win-win outcome.​

“But where a manufacturer believes we are in an inflationary environment and we should have a go at some price rises, I sense that is a dangerous strategy.”  ​

‘Pay a very heavy price’​

Food and drink manufacturers could potentially “pay a very heavy price”​ if they lost sight of consumers, he added.

“Let’s be clear, the retailers’ margins crashed in the last 10 years – Tesco became a loss-making business. A lot of manufacturing margins and certainly returns are much higher than supermarkets are enduring. That content needs to be borne in mind, in terms of where pricing goes.”​

Black urged manufacturers to gain a better understanding of the market and to “understand your consumer, as well as your customer”.​

‘Relationship between retailers and suppliers’​

In a wide ranging interview, Black went on to describe the relationship between retailers and their suppliers as “tetchy”​, following various high-profile rows about Brexit related price increases.

The Food Manufacture Group’s Business Leaders’ Forum​ was held at the London office of host sponsor law firm DWF. Other sponsors included: RSA Insurance Group, packaging specialist Charpak and analytical testing provider ALS Life Sciences UK.

Meanwhile, watch out next week for more multi-media reports on FoodManufacture.co.uk and in the February edition of Food Manufacture​​.

• This video was filmed and edited by Matt Atherton.