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Hospitality Sector Supplies Distributor Bunzl Flags Product And Labour Shortages

Published on Sep 1 2021 11:01 AM in General Industry tagged: Bunzl

Hospitality Sector Supplies Distributor Bunzl Flags Product And Labour Shortages

Business supplies distributor Bunzl has flagged labour crunches in its key markets including Britain and the United States and said that it is also facing shortages in the products it delivers to the hospitality and grocery sectors.

COVID-19 Pandemic-Related Supply Chain Interruptions

Several companies in Britain including Nando's, McDonald's and Greggs have been hit by COVID-19 pandemic-related supply chain interruptions, including delivery delays and a shortage of staff and truck drivers that are crippling distribution and availability of produce.

Seeing Material Shortages

Bunzl, which provides everyday items such as disposable tableware, food packaging, latex gloves and stationery to business customers and also supplies products ranging from counter-service packaging to cleaning chemicals to the retail and hospitality industries, said that it was seeing material shortages in its food service and consumables sectors as suddenly surging demand after COVID-19 lockdowns eased called for catch-up production.

Chief Executive Statements

"So far, [the labour shortage is] not extreme and because we also see product inflation in certain areas and we focus really on efficiencies (as well), we have been able to mitigate that in a good way but it may be a little bit more, back there in the second half," the British-based FTSE 100 group's, chief executive, Frank van Zanten, said to Reuters.

He expects labour shortages to ease as temporary unemployment benefits introduced during the pandemic are set to end in the United States.

First-Half Results

Bunzl reported a 17.5% rise in first-half adjusted pre-tax profit to £338.4 million and increased its dividend by 2.5%, helped by a recovery in demand as businesses such as offices, hotels and restaurants reopen.

The company said that wage inflation and delivery costs in the first half were offset by product inflation in COVID-19 related items such as disposable gloves. However, it said that COVID-19 related items were starting to see a price deflation in the second quarter.

New Acqusitions

The company, which is known for making several bolt-on deals, has also announced two new acquisitions of safety equipment distributors in Spain.

News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.

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