Shoppers are being warned to prepare for big price rises and shortages of everyday items as businesses grapple with the reality of operating in a COVID-safe world.
Australian retailers of all types are either experiencing or preparing for a shopping blitz as lockdowns end in the eastern states. After months of being cooped up in the house, consumers are bursting at the seams to get back into shopping centres.
But retailers are warning that you should expect higher prices for everything from electronics to cosmetics to meat, because of the increased costs of COVID-safe operating measures.
Coupled with looming stock shortages due to pandemic restrictions affecting imports, Christmas this year could be a frustrating time. And not just Christmas either, with COVID-affected economic conditions expected to be with us for years to come.
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Running a business in Australia post-COVID means taking on a range of new costs that simply didn’t exist before the pandemic. Personal protective equipment for staff, deep cleaning costs in the event of an exposure as well as lost productivity from isolation and social distancing are all adding up.
New costs are being added at each step of the supply chain, from the factory to the shop floor. And those costs will inevitably be passed on to you.
“It’s a significant increase,” Jam Pathirana, CEO of e-commerce warehousing firm B Dynamic told The New Daily.
“Our COVID-safe strategy forces us to do things totally differently.
“We’re not the only ones affected – our suppliers are also experiencing cost increases and they’re already passing that onto us as well.”
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B Dynamic handles parcel delivery and stock warehousing for more than 100 Australian and international brands.
Mr Pathirana says companies such as his have been absorbing many of these extra costs as they are bound by multi-year contracts signed with retailers before the pandemic.
But now those contracts are set to expire and businesses will be forced to raise their rates with retailers, which will then pass those extra costs on to the consumer.
“This is going to be part of our lives going forward,” Mr Pathirana says.
“COVID inflation is something you need to consider for any business.”
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It isn’t just retailers feeling the pandemic pinch either. There are warnings from Australia’s agricultural industry that customers should expect price hikes and product shortages for fresh meat, fruit and vegetables in coming months.
Much like retail, Australian agriculture is also facing increased operating costs and has been greatly affected by COVID restrictions.
Australian Meat Industry Council chief executive Patrick Hutchinson told The Guardian any further restrictions could affect supply in the lead-up to Christmas and beyond.
“There is enough meat in the country,” Mr Hutchinson says.
“The key thing is to make sure there are no artificial interventions to impact supply.”
Prices are also expected to remain high for fresh fruit and vegetables due to the pandemic. The federal department of agriculture is forecasting retail prices will continue to be higher than average and the fresh produce sector will grow by 4 per cent in the current financial year.
“The high costs of getting produce to market and elevated household demand are expected to affect consumer prices,” the department says.
“Farms and supply chain participants adapting to labour availability and costs have become an increasing feature of horticultural markets in Australia during the COVID-19 pandemic.”
Are you worried about getting what you need for Christmas? Will the price rises affect how you celebrate the holidays? Let us know in the comments section below.
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