LONDON -- U.K. food retailers said late last week the main problem during the nation's gasoline crisis has been demand, not supply.
British gasoline shipments were expected to begin to flow again over the weekend after protests were called off Thursday at the nation's main fuel refineries. The protests by truckers, farmers and the self-employed started last Monday and were against the high level of gasoline prices in the U.K., where almost 80% of the cost is made up of government taxes. British gasoline prices are the highest in Europe, averaging about $4.32 a gallon.
The leading food retailers said they continued to deliver to their stores throughout the U.K. last week as normal despite the lack of fuel supplies. However, consumers' fear of not being able to buy staple foods led many to bulk buy. As a result, some retailers were forced to ration the purchases of such staples as bread, milk and fresh foods.
"Our shipments have been going in as normal but demand for staple foods in some areas has been unusually high," a spokeswoman for Safeway plc, Hayes, England, said. "As a result we've given managers in some local areas the discretion to limit the amount of staples customers can buy."
Officials at all the leading food retailers echoed the Safeway comments. "Our stores have had deliveries going in overnight and we are supplying our stores as normal," a spokeswoman at J. Sainsbury plc here said Thursday. "The problem has been that we've been forced to make more deliveries than normal because demand has been higher than normal."
Sir Peter Davis, Sainsbury's chairman, wrote to Prime Minister Tony Blair mid-week warning that unless the protests ended British food retailers faced running out of supplies "in days rather than weeks." Davis wrote that panic buying meant Sainsbury's 440 stores were on average selling one-and-a-half times more produce than normal each day. Food retailers and manufacturers pressured the government to designate food and drink suppliers as essential services if the protest continued.
The major negative impact of the protests for food retailers has been their inability to get gasoline supplies for their own gasoline stations. Tesco plc, Cheshunt, England; Sainsbury's; Safeway, and Asda, the Leeds-based subsidiary of Wal-Mart Stores, Bentonville, Ark., are among the largest retailers of gasoline in the U.K. Officials of the retailers said almost all their gasoline stations remained closed late last week awaiting new supplies.