Inflation: printers “hammered from all directions”
Wednesday, May 18, 2022
Printers have reported price increases well beyond headline figures, as consumer inflation rises to its highest point in 40 years.
Inflation reached 9% in April, fuelled by spiking energy costs and the war in Ukraine’s impact on fuel and food prices.
Many printers, however, are finding their costs rising significantly faster.
More than 300 people responded to a recent Printweek poll that asked printers how fast their costs were rising and nearly a third (32%) said they were experiencing a rise in costs of over 20% in the last 12 months.
Almost seven in ten (68%) were seeing rates of over 10%.
Solent Design, a printer based in Southampton, has seen an increase in its paper costs of 35-45% since October 2021, with another increase coming on 30 May.
Martin Reynolds, managing director, told Printweek: “ It’s a challenge, but it’s a challenge for everybody.
“We’ve had to buy paper in advance and store pallets of paper for our mainline clients, so we can get a semi-hold on paper prices, at least for a month or two. The actual increases have just been absolutely ludicrous.”
It has not just been paper, either. Solent has had its fuel surcharges increase from 6% to 14% in the past six months, and its electricity and gas bill recently doubled when the company had to renegotiate its contract.
“You’re being hammered from all directions,” he said.
Despite the increases, he has found customers understanding. He attributed this to the fact that increasing prices have affected everyone in the UK, not just the print industry.
“Yes, it’s a pain, but what we’re finding is that everyone appreciates that things have gone up for various economic reasons.”
Inevitably, though, businesses have to pass on costs, according to Charles Jarrold, CEO of the BPIF.
Speaking to Printweek, he said: “No sooner have members been advised of increases and communicated these onwards, than there’s another round of increases, and that’s really difficult.
“We need to work more closely across the supply chain to get more forward visibility of what is coming down the line, so that printers can talk in a more structured way with their customer base, and we need to work closely with those customers to ensure we have the best possible understanding of their upcoming requirements.”
Paul Manning, managing director of London-based Rapidity, told Printweek that he has had to start passing costs on, despite concerns about the long-term impact it will have on business.
He said: “We’re worried it will drive demand down.
“You’re trying to pass on a higher cost at a time when people have been working at home for two years, and the demand for print is lower.”
Manning added that printers will need government support - perhaps in the form of an industry electricity price cap - and will need to support each other.
“Telling a print company that they’ve got to pay four times the amount [they used to] for power this year will put people out of business. No doubt about that.”
One solution, he said, especially for SMEs, would be to band together to bring supply prices down.
“Something we’re going to have to look at as a trade is buying collectively for things like paper.
“It’s something they do on the continent, and have done for years.”
Support, however, will not be forthcoming in the short-term according to Brendan Perring, general manager of the IPIA.
He told Printweek: “From our understanding, while there are plans being developed to support business in the UK, to try to mitigate some of these inflationary and logistics pressures, they won’t be brought on stream this quarter.”
The Treasury, he said, has had to ensure it has funds available to manage the situation in Ukraine.
He added: “There’s just no two ways about it, businesses are under a lot of pressure.
“We will continue to see businesses go under, or consolidate and make redundancies - York Mailing being a classic example.”