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From the editor: Supermarket stranglehold may be stronger than ever before

Chancellor Rishi Sunak appeared to embark on a spot of what could be called ‘Brewers Fayre economics’ in this week’s Budget, as he unveiled a slightly convoluted support scheme for restaurants.

Under the plans you can get 50 per cent off the first £10 you spend on eating out, at participating restaurants, on Monday to Wednesday, much like existing discount schemes at some budget restaurant chains.

 

It is a nice gesture, but one which may not spark a rush through restaurant doors and bolster hospitality coffers.

 

For a sector so hard hit by the pandemic, the long-term recovery may be torrid.

 

For agriculture this has certain ramifications, as the big winners during lockdown may, inadvertently, have been the supermarkets.

 

While the world struggles to adapt to a new normal, it might be that the multiples continue to drive home their advantage.


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If you went shopping at the peak of lockdown, there was little in the way of two-for-one offers or discounted items at the big retailers.

 

And why would there be? They had a captive audience they could squeeze, with the discounts only coming as trade returned to a more regular pattern.

 

That is what makes this week’s warnings of suppliers becoming collateral damage in a renewed retail price war slightly ominous.

 

With the large retailers having picked up so much trade which would have usually been spent in pubs or restaurants, it is an advantage they will be unwilling to give up.

 

But their renewed strength and perhaps, therefore, bullishness when it comes to their treatment of suppliers, could not only leave parts of the supply chain open to further pressure on margins, but also raises the spectre of the US and cheap imports, an issue which seems to be lodged in the psyche of many within agriculture at the moment.

 

While farming may have been largely shielded from the worst effects of the pandemic in the short term, the evolution of new consumer behaviour in the coming months, perhaps years, may drive as yet unforeseen changes in the agricultural supply chain.

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