Last week John Lewis Partnership (JLP) highlighted the impact the on-going supply chain issues the UK is facing will have on the Christmas season. Disruptions, which is affecting high street brands such as Nando’s, KFC, McDonalds, Tesco and Haribo, are being caused as the result of HGV driver shortages.
Many are blaming the crisis on Brexit. The crisis is also affecting other sectors, not just retail and hospitality, with construction firms also experiencing difficulties sourcing materials, which is causing cost of materials to increase at record breaking rates.
The shortages have had a drastic effect on the economy so far, as inflation climb to 3.2% in August, a 1.2% climb from July. The biggest increase on record since 1997. The major cause of this has been from hospitality and retail prices rising.
JLP have said that the inflation has put ‘significant uncertainty ahead of its busiest trading period’. The firm have purchased additional sea freights in order to fulfill deliveries of Christmas products, such as Christmas trees, however they are still financially recovering from the pandemic. The firm have so far this year made 4,000 workers redundant and closed 8 of their stores.
Partner and Solicitor Ian Carson, of the Harper James business disputes team, says ‘Businesses who rely on or are part of a supply chain must protect themselves in these uncertain times as best they can. It’s important you understand your commitments and any potential risks. This will only be achieved by having legally sound, and well drafted agreements in place with suppliers, and you should seek legal advice if issues in your supply chain are affecting your business’
‘Businesses who take a proactive approach to contract management will reduce the opportunity of disruption and subsequent disputes however if a dispute does arise, taking legal advice early in the process will help you negotiate the best possible outcome’
If your business is affected by supply chain issues, and requires legal support, our business disputes team are here to help resolve these challenges and fight your corner.
Businesses looking to enter into supply agreements should contact our commercial experts, who can help you draft and negotiate suitable terms to ensure you’re protected.