McDonald’s runs out of milkshakes as supply chain woes hit UK

McDonalds Restaurant in London Oxford Street. Restaurants were only allowed to open for take out orders during England’s second lockdown.

Dave Rushen | LightRocket | Getty Images

LONDON – Supply constraints weigh on the UK economy, with several large companies announcing they are out of stock on particular items.

McDonald’s said on Tuesday it was out of milkshakes across the country. The American fast food giant was also deprived of certain bottled drinks at its 1,250 UK outlets this week.

The popular chicken chain Nando’s was forced to close around 50 restaurants across Britain last week due to poultry shortages, while KFC was also unable to supply some menu items. these last weeks.

Supply chain difficulties are largely attributed to a shortage of truck drivers, caused by a confluence of new post-Brexit EU immigration rules, Covid-19 measures and self-isolation guidelines .

Willem Sels, chief investment officer for private banking and wealth management at HSBC, said on Monday that while the wave of self-isolation recommendations seen in July appeared to be moderating, there are signs that increased spending consumption resulting from the reopening of the economy is also fading. . However, he suggested that the underlying data remains bullish.

“Companies facing shortages of goods or workers often have to respond by paying more, which increases cost pressures,” he said.

“British PMIs [purchasing managers’ index] for manufacturing and services had already started to decline last month, and they have fallen further this month, but they remain well above the crucial 50 mark, which means the recovery continues. ”

Sels noted that the services PMI had fallen a little more than that of manufacturing, indicating that some of the supply bottlenecks for semiconductors and other goods may now ease. However, UK consumer demand and retail staffing continue to face challenges.

“In our view, it is only natural that economic growth should slow down somewhat after the strong initial V-shaped recovery we have seen in recent months. For equity markets, slower but still positive growth should still support UK stocks,” added Sels.

Calls to action on supply shocks

The Confederation of British Industry revealed on Tuesday that retail inventories fell to their lowest level on record in August.

The British Poultry Council this week accused the government of overlooking a labor shortage in the sector, particularly in agricultural and processing jobs.

EU nationals make up around 60% of poultry meat workers in the UK, the organization said, but many have returned to their home countries due to a combination of Brexit and the pandemic .

Meanwhile, pressure groups, the British Retail Consortium and Logistics UK, have jointly called for new measures to address a driver shortage of around 90,000. The groups called on the government to review plans not to grant temporary work visas for drivers from EU countries.

Gaps in supermarket and grocery store shelves have been seen across the UK, and some supermarket chains have started offering bonuses to increase recruitment.

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