Convenience retailers are complaining about a loss in sales due to shortages of bottled water.
The Grocer understands it to be a category-wide issue, with the likes of Evian, Volvic, Highland Spring and Buxton affected, particularly with larger formats and multipacks.
Disruption to wholesale supply began earlier this year following a raft of manufacturing and logistical issues as well as labour shortages. However, as the heatwave spiked demand it has depleted availability further.
One wholesaler told The Grocer its availability on bottled water was currently at 20%, with Evian, Volvic, Highland Spring and Buxton all out of stock.
The shortage has forced some wholesalers to put caps in place to manage stock control. The Grocer understands that Booker, for example, has limited bottled water purchases to three cases per customer. However, one retailer said “this wouldn’t last a day”.
Lack of availability has caused bottled water sales to drop as low as 25% of normal levels for some retailers. “The shortage during this warm weather has cost us sales and the great availability we offer,” said one retailer. “Our customers don’t fully understand the issues we are currently facing.”
Others have said the shortage has had a knock-on effect on their profits too, as shoppers are having to trade down from premium brands to own-label or local water suppliers.
“You’d think water is water but it’s not,” said one retailer. “We are managing to get through with a lot of niche and cheaper water brands to avoid losing custom but with the suppliers not being able to supply us properly, it means that customers are trading down to less expensive brands and we lose profit.
“We are also making less per bottle than usual, especially on the premium brands, because the shortage has led those suppliers with stock to raise the wholesale prices,” the retailer added.
Nisa retailer Richard Kent said profits had also been hampered by a lack of larger formats, which tend to hold a higher cash margin. “We’re stocking Celtic Spring Water 500ml and people are going for it but if they had the choice they would normally go for a one-litre, which sells better.”
There are also concerns that the added trips to cash & carry depots to source water was increasing costs for retailers. Nisa retailer Kishor Patel, who has been stocking up on Ice Valley water, said: “Due to rationing at Nisa, they have been unable to deliver our orders so we’re having to make trips to Booker and Costco to fullfill demand.
“It’s been a real challenge, but with our extra hard work we’ve managed to keep the fridges and shelves full most of the time.”
Nisa said it was working in “close collaboration” with water suppliers to ”best manage availability and minimise disruption” to retailers.
A Natural Source Waters Association spokesman said: “Natural source waters have seen sales bounce back strongly post lockdown. This, combined with lower than normal stock levels at the start of the summer, supply chain challenges and labour shortages, has left the overall distribution network overstretched and struggling to meet demand. This meant that as the hot weather surge in sales occurred, it has not been possible for this increased demand to be met.
“Delivering for grocery, wholesale and convenience customers is a top priority for our members, who are working tirelessly with distributors, wholesalers and retailers to resolve this and get their products on shelf during what has been a demanding period for the category.”
No comments yet