Global Inflation Report
How inflation took over the world... and how retailers are responding to help put customers first
Siro Descrovi Customer Strategy Lead
The Global Landscape
Global inflation is on an upwards trajectory not experienced in a generation or more. In June 2022, the US annual inflation rate hit a 40-year high of 9.1%. The Euro zone reached the same figure in August 2022, the culmination of nine consecutive record-breaking months, and inflation in Latin America’s largest economies is the highest it has been in 15 years.
This complex landscape is the result of a series of significant global events.
Inflation started to rise with the outbreak of COVID-19 in early 2020. Global manufacturing output fell and supply chains were shipping fewer components and products. Across the world, governments offered a variety of stimuli to try and keep demand consistent and avoid recession, but with reduced supply, inflation was inevitable.
With the global rollout of coronavirus vaccines and easing of lockdown restrictions, many predicted a short spike in inflation. Once factories were back to full capacity, supply would return and markets would balance out again. The road to recovery was laid out and optimism was high. Then, in February 2022, Russia invaded Ukraine.
Russia is the world’s third largest producer of oil, the second natural gas producer and is in the top five producers of steel, nickel and aluminum. It is also the largest wheat exporter in the world. Ukraine is in the top ten global producers of corn, wheat, sugar beet, barley, soya and rapeseed. It is the world’s largest producer of sunflowers.
In disturbing the supply of these raw materials, the Russian invasion of Ukraine has had a major impact on global prices – both directly, for those countries that rely on imports of materials or crops from Russia and Ukraine, and indirectly, by impacting global stock. And it has all come against an already turbulent backdrop of global inflationary pressures and disrupted supply chains following the pandemic.
This inflationary pressure and rise in wholesale prices is now having a real effect on the lives, and wallets, of billions of people around the world. In this report, we look at how customers are starting to feel the pinch and how retailers are responding to help their customers weather the storm.
“Inflation is near double-digit territory in many of the world's biggest economies, a level not seen in close to a half century. With the notable exception of the United States, a peak is still months away.” - Reuters, August 2022