Chairman warns of food price inflation at 5%
The chairman of Britain’s biggest supermarket chain Tesco has warned “the worst is yet to come” on food price inflation, as he predicted it will soon hit 5%.
John Allan, who has chaired Tesco since 2015, told the BBC’s Sunday Morning programme that he was well aware people on very tight budgets are having to choose between food and heating. He said the idea this was happening was very “troubling”.
Overall inflation currently stands at 5.4%, a 30-year high, and is predicted to top 6% in the spring, just one element of the cost of living crisis facing UK households. Poverty groups have warned about the impending threat to those on the lowest incomes.
“In some ways the worst is still to come – because although food price inflation in Tesco last quarter was only 1%, we are impacted by rising energy prices. Our suppliers are impacted by rising energy prices. We’re doing all we can to offset it … but that’s the sort of number we’re talking about. Of course, 5%,” he said.
Allan admitted some people will “of course” have less to spend on luxuries, as the price hikes coincide with a rise in national insurance contributions and the £693 hike in the average family’s annual energy bill, to £1,971, both of which come in from April.
But he said grocers and suppliers were not immune from rising energy costs. A report this week from the British Retail Consortium said food inflation accelerated to 2.7% in January, up from 2.4% in December.
Rising prices prompted the Bank of England to raise interest rates to 0.5% on Thursday, the same day the energy bill rise was announced and the chancellor unveiled a support package for households.
Allan said: “I think the combination of increasing energy prices, the impact of national insurance increases on
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