Poundstretcher has warned that its super-cheap prices will rise before Christmas - though it will try to pass on as little as possible to customers.
The Poundstretcher chief executive, Aziz Tayub, said the cost of items including Kelloggs cereal, Fox's biscuits and Heinz products like baked beans are set to rise in the next few months.
He said: "We have had a lot of negotiations over food and toiletry supplies from the UK over potential price increases in the next few months – brands such as Coca Cola, Kellogg’s, Heinz, Britvic and Fox’s biscuits.
“I understand there will be increases of 3-5% in the next few months and I think it’s more down to worldwide raw material costs."
But he said Poundstretcher's prices would rise by less than that and its outlets would have enough stock for Christmas, Business Live reports.
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Partly this is because Poundstretcher has a relatively small fleet of lorries - around 30, which have been almost unaffected by lorry driver shortages rocking other firms .
Poundstretcher employs around 5,500 staff and around two-thirds of its stock comes from China.
The rest is made in the UK and Europe.
Tayub said: “We have got no shortage of stock – we have plenty of imported stock and plenty of UK stock, which is enough to fulfill our sales targets right up to next March.
“It’s possible that the supermarkets are suffering as they sell products faster, but if you go into our stores they are full of food and toiletries and Christmas stock."
Tayub added that Poundstretcher could see a second price rise in 2022.
“Here in the UK the labour shortage and higher energy costs will affect us later on and maybe some of our suppliers are trying to anticipate that too," he said.
“There might be a second price increase at some point, which would be when we have to act. But it’s not easy finding alternative suppliers for branded products – it is something that will affect us next year.”
Earlier this week shoppers were warned of a “tsunami” of supermarket price rises in the run-up to Christmas.
Major food suppliers have warned of a 5% price increase from grocery chains which is expected to be passed on to consumers.
The warning from David Sables, chief executive of negotiations specialists Sentinel Management Consultants, comes after Morrisons issued a similar warning of “industry wide” hikes.
Mr Sables told trade journal The Grocer: “We have seen suppliers negotiating around 5% increases. Many are starting to come to fruition. Retailers will try to soak it up. Most likely is consumer price increases.”
A combination of truck driver shortages , the pingdemic and Brexit continue to impact the supply chain while poor harvests around the world are making the problem worse.
One supplier warned: “A tsunami of price increases is heading towards supermarkets. Some suppliers are hanging on by their fingernails.”
