Tesco: supermarket prices will rise
Chairman at UK’s biggest supermarket warns shoppers to expect price hikes at the till following the slump in the pound.
Tesco chairman John Allan has admitted that it’s ‘very likely’ that the costs of some supermarket grocery products will have to rise.
He blames the slump in sterling, which has dropped 16% against the Euro and 19% against the dollar since the shock EU referendum result to Brexit on June 23.
The fall in the value of the pound means that the cost of importing food and ingredients has risen dramatically.
“We are trying to defend our customers from unjustified price increases but that it is likely there will be some price increases going forward, I think is very likely,” Allan told BBC radio.
Compare the best supermarket reward cards to boost your Nectar or Clubcard points
Inflation
The slump in the pound is likely to impact inflation figures.
Inflation currently stands at 1%, but Allan believes this will ‘budge up’ to 2-3% - with food prices the main driver.
Some analysts have claimed supermarket price rises could be as much as 10% or even 20%, but Allen insisted rises would be "much less".
Marmitegate
Tesco hit the headlines earlier this month over a battle with Unilever after the supplier reportedly tried to force the supermarket to impose a 10% hike on the cost of products it supplies, most notably Marmite.
Allan did not comment on the dispute but his comments suggest the supermarket hasn’t ruled out price rises in the near future.
He said: “We see our role as retailers not to prevent our suppliers from making legitimate cost increases where they think that’s necessary, but certainly scrutinising those cost increases very hard.”
The supermarket boss also warned that Theresa May should be careful of immigration controls which could harm the economy.
He said: “Industries like the agriculture industry, picking and packing fruit and veg and meat, are heavily dependent on migrant workers, not just seasonal migrant workers but people who are here 52 weeks a year. Our fresh food suppliers are very concerned that is properly taken into account.”
Compare the best supermarket reward cards to boost your Nectar or Clubcard points
Don’t miss these:
Poundland launches new ranges costing more than £1
Comments
Be the first to comment
Do you want to comment on this article? You need to be signed in for this feature