‘Golden era’ of cheap food is ending, says ex-Sainsbury’s boss

theguardian.com:

The UK’s “golden era” of cheap food is coming to an end, the former Sainsbury’s boss Justin King has warned, saying households should be prepared for higher grocery bills in the long term.

King claimed supermarkets could not be expected to absorb the extra costs entirely or protect consumers from rising prices, despite having announced higher earnings. Last month, Tesco and Sainsbury’s reported a doubling in their annual pre-tax profits to £2bn and £730m respectively.

“The headline profit numbers are of course, large in the context of any household budget,” King told BBC Radio 4’s Today programme. “But the margins in supermarkets are around 3%. So even if supermarkets made no profits at all, they wouldn’t really be able to make a huge dent in the cost inflation that is coming through the system,” he said.

King warned shoppers would have to start making hard choices on how they spend their money, particularly as soaring inflation – made worse by the ripple effects of the war in Ukraine – pushed up prices on supermarket shelves. The Bank of England said last week headline inflation was likely to exceed 10% this year, the highest since 1982.

“We have been perhaps through a golden era. We spend much less as a proportion on average of our household budgets on food than we had almost any time in history, and that’s been [on] a long, gentle decline. So I suspect what we will see is a higher proportion, across the piece, spent on food for the longer term.

“It won’t actually be that high in historical terms but it will require adjustments in terms of how we all prioritise our family budget spending,” King added.

However, the former Sainsbury’s chief executive recognised many families would not have extra cash to cover higher grocery