Tesco chairman John Allan has said that "the worst is yet to come" in terms of food price inflation, in an interview with the BBC.
Speaking to the BBC's Sunday Morning programme, Allan said that he expected food price inflation to soon reach 5%, which is likely to put pressure on households.
“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," Allan told the programme. "Our suppliers are impacted by rising energy prices. We’re doing all we can to offset it."
Food Price Inflation
Last week, a report from the British Retail Consortium said that food inflation rose to 2.7% in January, up from 2.4% in December.
This was the highest food inflation rate since October 2013, the BRC said, and is just one of a series of price increases that households are facing.
"The combination of increasing energy prices, the impact of national insurance increases on people’s incomes, and to a much much lesser extent increasing food prices, is going to squeeze the hardest-up still harder," Allan said.
In January, Tesco reported a 0.2% like-for-like sales increase in the UK in the third quarter of its financial year, while group sales were up 2.4%.
It recently announced plans to discontinue the low-cost Jack's brand, developing that store concept's own-brand proposition into a private label stocked by its wholesale business, Booker.
© 2022 European Supermarket Magazine – your source for the latest Retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
