Foodservice giant 3663 has written to its customers to warn them to expect price hikes on every single line this month as it looks to offset rising fuel, utilities and staff costs.

Customers were alerted to the increases in a letter seen by The Grocer featuring sensationalist newspaper-style headlines highlighting the country’s economic problems.

“Despite ongoing initiatives to improve operational efficiency we are unable to absorb all the inflation we are experiencing and maintain our service at its current level,” group sales director Andy Kemp wrote.

“Having taken all mitigating steps possible, we are now reluctantly going to have to apply a cost increase across all lines from September.”

Customers could also expect price increases on specific products as a result of food inflation, said Kemp. “Despite our considerable negotiation and buying power we are unable to avoid all the increases we are seeing from our suppliers,” he said.

3663 would look to alternative sources where possible, he promised, adding that these had already allowed it to avoid passing on price rises to over 4,000 lines out of 6,500.

However, there were “no real options” for categories such as fish, wheat, dairy and oil, he claimed, as suppliers had all raised their prices by a similar amount.

The company understood that choice and price were important to customers and would continue to develop its 3663 own brand and deliver strong monthly promotions, he added.

In a separate presentation, 3663 said its operational costs from pay and fuel alone had risen £10m since May 2008, the last time it implemented a business-wide ‘operating cost increase’. Putting up prices now would still not cover its increased operating costs, it claimed.

3663 would nevertheless continue to be open with customers and operate a published price list, said group commercial director Ian Crawford. It would also do what it could to mitigate the impact of price rises on its customers.

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