Distributor Bunzl latest to flag supply chain hiccups

Business supplies distributor Bunzl said it was seeing material shortages in its foodservice and consumables sectors

Business supplies distributor Bunzl has flagged labour crunches in its key markets including the US and Britain and said it was also facing shortages in the products it delivers to the grocery and hospitality sectors.

Shares in Bunzl, which provides everyday items such as disposable tableware, food packaging, latex gloves and stationery to business customers, fell sharply.

Several companies have been hit by pandemic-related supply chain interruptions, including delivery delays and a shortage of staff and truck drivers that are crippling distribution and availability of produce.

Bunzl, which also supplies products ranging from counter-service packaging to cleaning chemicals to the retail and hospitality industries, said it was seeing material shortages in its foodservice and consumables sectors as suddenly surging demand after coronavirus lockdowns eased called for catch-up production.

"So far, (the labour shortage is) not extreme and because we also see product inflation in certain areas and we focus really on efficiencies, we have been able to mitigate that in a good way but it may be a little bit more, back there in the second half," chief executive Frank van Zanten said.

Bunzl reported a 17.5% rise in first-half adjusted pre-tax profit to £338.4m (€395m) and increased its dividend by 2.5%, helped by a recovery in demand as businesses such as offices, hotels and restaurants reopen.

-Reuters