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Retailers are once again facing mounting pressure across their supply chains, as inflationary forces build from multiple directions at once.<\/p>\n
However, for consultancy firm CI&T global director of retail strategy and insights Melissa Minkrow, the key issue is that there is no single cause. Instead, she says, the pressure is building across the entire system.<\/p>\n
\u201cI honestly think pressure is all over the sector,\u201d she says. \u201cThere are so many prongs to the increasing cost of production for retailers that it\u2019s really happening at every angle and every part of the supply chain.\u201d<\/p>\n
And the data backs that up. US import prices rose 1.3% in February 2026, the sharpest monthly increase in nearly four years, driven largely by fuel and goods costs. In the UK, inflation remains above target at around 3%, with further upside risk tied to energy and logistics disruption.<\/p>\n
From pandemic shock to Middle East crisis<\/h6>\n
Much of the current volatility is being driven by energy markets and shipping disruption, particularly around the Strait of Hormuz, which handles roughly a fifth of global oil supply.<\/p>\n
Oil prices have risen by more than 30% in recent weeks, while shipping costs have surged alongside this. Supertanker rates have climbed to around $423,000 per day, and LNG shipping costs are up more than 40%. In practical terms, moving oil now costs about $14.50 per barrel, close to a fifth of its total price.<\/p>\n
For retailers, that quickly feeds into higher transport and distribution costs. Imported fuel prices alone rose 3.8% in a single month, while diesel prices across Europe have also started climbing again.<\/p>\n But Minkrow is clear that the current geopolitical situation is only part of the story. \u201cThere\u2019s been a lot of variables for quite a while now,\u201d she explains.<\/p>\n Minkrow points to several overlapping driver of inflation across retail supply chains including rising material and production cost particularly for imported goods; higher shipping and distribution costs; and labour shortages and wage growth.<\/p>\n \u201cThe pandemic is still having effects on retailers,\u201d she adds. \u201cThere\u2019s also lot of geopolitical instability, so there\u2019s been a lot of variables.\u201d<\/p>\n \u00a0For the perspective of the UK, Minkrow says in order to understand where the pressure is coming from now, it is important to look back at what happened during and after Covid.<\/p>\n UK inflation peaked at 11.1% in October 2022, the highest level in over 40 years, after starting the pandemic period at just 1.5% in early 2020.<\/p>\n Food inflation in particular has seen a sharp and lasting shift. UK food prices have risen by around 37% to 38% since 2020, a scale of increase far beyond historical norms.<\/p>\n At its peak, food inflation hit 19.2% in March 2023, significantly higher than overall inflation.<\/p>\n She adds that the long tail of Covid disruption is often underestimated, even though it continues to shape supply chain capacity and costs today.<\/p>\n Even today, although the rate has slowed, prices remain elevated. Food inflation is still running at around 3% to 4% annually, meaning costs are still rising, just at a slower pace.<\/p>\n Minkrow is clear that the pandemic continues to cast a long shadow.<\/p>\n \u201cThe pandemic is still having effects on retailers,\u201d she explains. \u201cThere were a lot of changes made to the supply chain because of manufacturers being unavailable\u2026 so many manufacturers are still\u2026 navigating that and getting back up and running.\u201d<\/p>\n That lingering disruption, combined with structural cost increases, has left supply chains more exposed than before.<\/p>\n However, while costs are clearly rising, the response from retailers has been more nuanced than expected.<\/p>\n \u201cThat\u2019s what\u2019s been really interesting,\u201d Minkrow says. \u201cI was expecting them to pass them along to consumers and it\u2019s not that they\u2019re not\u2026 but they\u2019re passing them on to consumers at lower rates than what we all anticipated.\u201d<\/p>\n Instead, many retailers are choosing to absorb a larger share of the pressure, even if that comes at the expense of short-term growth. For some, that means accepting a tougher trading environment.<\/p>\n \u201cSome are just\u2026 accepting that this is going to be a challenging time for growth, and it\u2019s more about surviving rather than thriving,\u201d she says.<\/p>\n Others are taking a more dynamic approach, using technology to adjust pricing and promotions in real time. This can mean holding prices in some areas while offsetting costs elsewhere, depending on demand and customer sensitivity.<\/p>\n And, Minkrow says, impact is not evenly spread. Grocery retailers, in particular, face tighter margins and additional pressure from perishability, while smaller retailers are more exposed due to their lack of scale.<\/p>\n If there is a single theme emerging, it is that supply chains are becoming more complex rather than more stable.<\/p>\n \u201cI\u2019d say the complexity of the supply chain increasing is a long-term challenge. It will never get simpler,\u201d Minkrow says.<\/p>\n That complexity is being driven by a mix of structural factors, from global sourcing networks to rapidly shifting consumer demand. Social media and fast-moving trends are adding further pressure, while technology is both helping and complicating decision-making.<\/p>\n Retailers are responding in different ways. Some are diversifying suppliers across regions to reduce risk. Others are moving production closer to home to gain more control and reduce transport exposure.<\/p>\n But each approach comes with trade-offs. As Minkrow puts it, businesses are constantly weighing \u201cdistribution costs versus manufacturer costs\u201d as both sides of the equation continue to shift.<\/p>\n The question many in the industry are asking is whether this level of disruption is temporary.<\/p>\n For Minkrow, the answer is mixed. While individual pressures may ease over time, the overall challenge is here to stay.<\/p>\n \u201cSome of these challenges are only short-term challenges,\u201d she says. \u201cBut. mastering the supply chain is a forever challenge.<\/p>\n \u201cI\u2019d say the complexity of the supply chain increasing is a long-term challenge. It will never get simpler.\u201d<\/p>\n She says this reflects a broader shift in how retailers need to think about operations. Inflation, disruption and volatility are no longer occasional shocks, but instead are becoming embedded features of the system.<\/p>\n Meanwhile, in contrast, globalisation, faster consumer trends and advances in technology are all adding layers to supply chain decision-making.<\/p>\n As a result, the focus is moving away from waiting for stability and towards building supply chains that can respond in real time.<\/p>\n Or, as Minkrow puts it, the issue is not whether disruption will continue, but how retailers adapt to it.<\/p>\n![\"\"](\"https:\/\/www.retailgazette.co.uk\/wp-content\/uploads\/2026\/03\/shutterstock_2695252661-300x200.jpg\")
Retailers rethinking how they manage rising costs<\/h6>\n
![\"\"](\"https:\/\/www.retailgazette.co.uk\/wp-content\/uploads\/2026\/03\/shutterstock_2377325453-1-300x169.jpg\")
A permanent shift, not a temporary spike<\/h6>\n