To all our customers, we will be implementing a price increase across out products on the 21st November. Now is the time to stock up before the new price rise. Free shipping on all orders with the discount code: STOCKMEUP.
A Note On Price Increases:
How much change do you get from a tenner for 2 pints? The answer now is none. Very often in fact you’ll have to fork out more cash to buy your drinks. Prices have been flying up in all aspects of our lives and inflation and doom and gloom headlines are becoming more and more frequent.
We wanted to write a quick post to explain how we have been affected as a small e-commerce business. We also thought it would be useful to put some context to the explanations for the price increases.
Covid-19:
So why did this actually affect the price of goods? The main reason was the increase in the cost of shipping. According to the CBBC (China-Britain Business Council) the cost of shipping went up by over 350% between 2020-2021. This was driven by a shortage of containers. As parts of the world went into lockdown at different times, when China emerged first, the containers it needed were locked down in the rest of the world (Europe and the US). This meant that the cost to secure a spot on any container travelling between China and the UK increase. This is called the supply and demand concept. Add to that staff shortages due to isolation rules and lockdowns and the price of shipping went through the roof.
Ever Given accident:
In March 2021, the shipping vessel Ever Given got stuck in the Suez Canal and blocked the entire waterway for a week. This accident caused shipping charges to shoot up even more. 12% of global trade goes through the Canal, and the incident cost billions due to delays that were caused. Ports were already dealing with delays in berthing and dispatching cargo ships and further delays from incidents like these put more pressure on freight rates. The cost of shipping is expected to remain high until 2024 as a result.
Russia’s Invasion of Ukraine:
Energy prices have soared as the UK and the majority Europe are now no longer buying Russian oil and gas. This reduced supply increases demand on other players and the price has skyrocketed. Also, Ukraine and Russia were large exporters of various essential commodities. With sanctions on Russia and disruptions to Ukraine’s exports, there is now a global shortage of these essentials, causing inflation to jump up.
Falling Value of GBP:
As the pound falls against the dollar, companies who pay for goods and services in USD are affected,. They now find themselves paying comparatively more for the same thing than they did before. Large companies are able to protect themselves from this to a certain extend through complex hedging strategies. These however are expensive to arrange and small business have far fewer options to protect themselves from currency movements.
What does it mean for us?
As an importer, we are directly affected by the shipping price increase and have seen this notably in our imports over the last few years. We are a small business, trying to supply the freshest and best tasting spices, and so cant take advantage of any economies of scale for our micro imports. The choice was either to suck up the cost or look for alternate means. We even found ourselves on Skyscanner at one point looking for return flights to go and collect the spices ourselves! But alas, families and time pressures meant this option was not feasible. However this increase has put a very real squeeze on our margins for a while which we decided to stomach ourselves for 2021 and into 2022.
We have also faced rising costs from our suppliers, both spice producers and our technology and warehouse costs. It is vitally important for us to pay our producers a fair price for the spices to support them, and so this isn’t an area we have looked to scrimp on. As a result, it has come to the point where we have been squeezed from all angles. If we did not increase our own prices, then we would not be able to continue supporting either out customers or our suppliers.
What have we done:
As such, we have increased the cost of our tins. But, we have tried to keep the increase as small as possible for our refill packs to support our loyal returning customers as we know how important it is to put a great meal on the table in times like these. We also hope that our customers can see the value in our spices and recognise how far a single tin can stretch.
While the increase may seem large in percentage terms, when you think of how many meals you can make from one tin of spices, this is comparatively a much smaller increase per meal than some other foodstuffs. Take for example the alarming increase in eggs and dairy products. It is always important to recognise true value of a product, and we believe there is A LOT of value from our spices given the amazing flavour they can add to a bland dish, and the number of bland dished a single tin can transform.
We hope you as the consumer understand a little better the pressures felt by business after reading this. We are determined more than ever to keep providing you with the freshest, best tasting spices out there. This price increase has enabled us to do this and we are excited about what lies ahead for us. Watch this space.
Team Rooted.
