The feedback from companies experiencing cost pressures is growing. The spike seen in both soft commodity prices and transport costs has persisted for longer and will lead to higher supermarket inflation in our view. The only remaining question is when, and by how much? We expect some evidence to show through in August-September 2021 given supplier feedback. Packaged grocery inflation is likely to be 1.5-2.0pp higher by early calendar 2022. Inflation is generally positive for supermarket retailers sales and earnings.