LONDON — Shoppers around the world will pay even more for groceries this year than they did in 2022, according to retailers, consumer goods firms and investors, unless commodity costs decline or the shift to cheaper store-brand products accelerates.

Retailers and consumer goods producers have been stuck in tough price negotiations for more than a year now, with friction beginning in 2021 over COVID-related supply chain logjams.

This has since ballooned into fights over the high cost of raw materials and energy in the wake of Russia’s invasion of Ukraine, with rising prices of basic foodstuffs from bread to milk and meat exacerbating a cost-of-living crisis in Europe.

Britons paid a record 16.7% more for food in the four weeks to Jan. 22 compared to the same period last year, according to research firm Kantar. The US food index, including meals eaten at home and in cafes and restaurants, increased 10.4% for the year ended in December.

Mark Schneider, CEO of the world’s biggest food group Nestle, last week told a German newspaper it would have to raise prices of its food products further this year to offset higher production costs that it has yet to fully pass on to consumers.

“Investors will pay a premium for companies that exhibit pricing power in their portfolio without adversely impacting volumes and market share,” Jack Martin, a fund manager at Oberon Investments, said.

Big, packaged-goods companies’ margins have been squeezed by higher input costs for over a year as the price of ingredients like wheat and sunflower oil have skyrocketed since the Ukraine war began last February.

Unilever, which is due to report full-year results on Thursday, said in October that its underlying price growth — an indicator of pricing — rose to a record 12.5% in the third quarter. Nestle and dairy giant Danone are due to report results later this month.

Tineke Frikkee, a portfolio manager at Waverton Investment Management, expects Unilever to hike prices in 2023, though selectively.

“The last time we heard from Unilever, it was made clear that they prefer to sell fewer products at higher prices, to keep prices below peers and gain market share,” Ms. Frikkee said.

RETAILER PUSHBACK
Consumer goods manufacturers — will continue to raise prices until they recover their profitability, said Bernstein analyst Bruno Monteyne.

“The only thing that can stop this is…consumers starting to trade down to private-label products at a more rapid pace … (and) if commodities keep declining, then there may be no need for more price increases.”

In December, the CEO of Walmart, the world’s biggest retailer, warned that some “packaged goods suppliers are still pointing us towards more inflation next year on top of the mid-double digits this year”.

“Dry grocery and consumables have double-digit to mid-double-digit inflation that feels stubborn to us,” Doug McMillon said, adding that suppliers were being encouraged to focus on “the longer term with us”.

European retailers are also pushing back.

“With the big suppliers, we do insist on long-term contracts that do not have to be renegotiated,” Belgian discount retailer Colruyt told Reuters.

Britain’s biggest supermarket group Tesco and Kraft Heinz last year could not agree on prices for some brands, resulting in several products disappearing from shelves. This month, Unilever’s Hellmann’s mayonnaise was discontinued in South African stores due to cost inflation.

Tesco CEO Ken Murphy said last month he was hopeful inflation would peak by mid-2023 and then start to ebb.

Barclays analyst Warren Ackerman said although food commodity prices on average were down 20% from March peaks, it will take time for this to reflect in companies’ costs. — Reuters

KAHRAMANMARAS/ANTAKYA, Turkey — Families in southern Turkey and Syria spent a second night in the freezing cold on Wednesday as overwhelmed rescuers raced to pull people from the rubble two days after a massive earthquake that killed more than 9,600 people.

In Turkey, dozens of bodies, some covered in blankets and sheets and others in body bags, were lined up on the ground outside a hospital in Hatay province.

Many in the disaster zone had slept their cars or in the streets under blankets, fearful of going back into buildings shaken by the 7.8 magnitude tremor — already Turkey’s deadliest since 1999 — that hit in the early hours of Monday.

Rescuers there and in neighboring Syria warned that the death toll would keep rising as some survivors said help had yet to arrive.

“Where are the tents, where are food trucks?” said Melek, 64, in the southern Turkish city of Antakya, adding that she had not seen any rescue teams.

“We haven’t seen any food distribution here, unlike previous disasters in our country. We survived the earthquake, but we will die here due to hunger or cold here.”

With the scale of the disaster becoming ever more apparent, the death toll rose above 7,100 in Turkey. In Syria, already devastated by 11 years of war, the confirmed toll climbed to more than 2,500 overnight, according to the Syrian government and a rescue service operating in the rebel-held northwest.

Turkish President Tayyip Erdogan has declared a state of emergency in 10 provinces. But residents in several damaged Turkish cities have voiced anger and despair at what they said was a slow and inadequate response by the authorities.

Mr. Erdogan, facing a close-fought election in May, is expected to visit some of the affected areas on Wednesday.

The initial quake, followed hours later by a second one almost as powerful, struck just after 4 a.m. on Monday, giving the sleeping population little chance to react.

It toppled thousands of buildings including hospitals, schools and apartment blocks, injured tens of thousands, and left countless people homeless in Turkey and northern Syria.

Turkish authorities say some 13.5 million people were affected in an area spanning roughly 450 km (280 miles) from Adana in the west to Diyarbakir in the east — broader than the distance between Boston and Philadelphia, or Amsterdam and Paris.

In Syria, it killed people as far south as Hama, some 100km from the epicenter.

Turkey’s disaster management agency said the number of injured was above 38,000.

‘UNDER THE RUBBLE’
In the town of Jandaris in northern Syria, rescue workers and residents said dozens of buildings had collapsed.

Standing around the wreckage of what had been a 32-apartment building, relatives of people who had lived there said they had seen no one removed alive. A lack of heavy equipment to remove large concrete slabs was impeding rescue efforts.

Rescue workers have struggled to reach some of the worst-hit areas, held back by destroyed roads, poor weather and a lack of resources and heavy equipment. Some areas are without fuel and electricity.

Aid officials voiced particular concern about the situation in Syria, where humanitarian needs were already greater than at any point since the eruption of a conflict that has partitioned the nation and is complicating relief efforts.

The head of the World Health Organization has said the rescue efforts face a race against time, with the chances of finding survivors alive slipping away with every minute and hour.

In Syria, a rescue service operating in the insurgent-held northwest said the number of dead had climbed to more than 1,280 and more than 2,600 were injured.

“The number is expected to rise significantly due to the presence of hundreds of families under the rubble, more than 50 hours after the earthquake,” the rescue service said on Twitter.

Overnight, the Syrian health minister said the number of dead in government-held areas rose to 1,250, the state-run al-Ikhbariya news outlet reported on its Telegram feed. The number of wounded was 2,054, he said.

Turkey’s deadliest earthquake in a generation has handed Mr. Erdogan a huge rescue and reconstruction challenge, which will overshadow the run-up to the May elections already set to be the toughest of his two decades in power.

The vote, too close to call according to polls before the quake, will determine how Turkey is governed, where its economy is headed and what role the regional power and NATO member may play to ease conflict in Ukraine and the Middle East. — Reuters