British supermarket chain Tesco’s chairman, John Allan, has reportedly warned that food price inflation in the nation will get worse, predicting that it will soon hit the 5% mark.
Allan, who has served as the chair of Tesco since 2015, stated that he is well aware that people in the UK are on such a tight budget that they are having to choose between heating and food, and that the idea of this happening is very disturbing.
Overall, inflation in the country is at a 30-year high, currently standing at over 5.4%, and is expected to jump to 6% by spring this year, further adding to the cost of living crisis that households are facing nationwide.
Meanwhile, poverty groups have warned of the looming threat over those with the lowest incomes.
Allan stated that although inflation in Tesco was only at 1% last year, its suppliers were affected by rising energy prices, which impacted the group as well.
He claimed that while the group is doing what it can to offset the inflation, it is still expecting it to reach 5%, adding that the worst is still to come.
Allan expressed that some people would have to spend less on luxuries, with price hikes coinciding with increases in national insurance contribution and the raising of energy price cap, both of which are expected to come into effect in April.
He also added that grocers and suppliers were also likely to be affected by the rising energy costs. As per a recent report by the British Retail Consortium, food inflation has jumped from 2.4% in December to 2.7% in January.
Recently, prompted by increasing prices, the Bank of England also increased its interest rates to 0.5%. The supposed hike was announced on the same day Ofgem announced the energy price cap hike, and UK Chancellor followed the news by unveiling a support package for households.
Food poverty activist Jack Monroe claimed that prices of basic staples were rising faster than those of other goods. Allan, however, stated that it was not the case at Tesco, as price hikes depended on individual products, claiming that while coffee prices went up, the price of the cheapest baked beans tin at Tesco was lower than it was 5 years ago.
Source credit: https://www.theguardian.com/business/2022/feb/06/tesco-chair-warns-food-price-inflation-of-5-is-just-around-the-corner
