Tesco boss admits families are ‘very hard pressed’ amid cost-of-living crisis but admits he can’t predict when price hikes will peak
- John Allan declined to predict when, but said inflation is ‘likely to go down’
A Tesco boss has admitted soaring food costs have left British families feeling ‘very, very, very hard pressed’.
John Allan, chairman of the British supermarket chain, recognised that shoppers want to know when to expect ‘some easing of inflation’ but told the BBC he not going to ‘brave’ a forecast of when prices would dropped.
The ongoing cost-of-living crisis and produce shortages have pushed food inflation to a record-high of 18.2 per cent in February.
In response, the Bank of England governor Andrew Bailey urged businesses to think twice before raising prices, but grocery bosses say they have to react to hikes from their suppliers.
Tesco chairman John Allan (pictured last month) has admitted that soaring food costs have left British families feeling ‘very, very, very hard pressed’, but said he cannot predict when price hikes will peak
The chairman’s remarks come as millions of Brits are bracing themselves for an onslaught of surging bills this month
Mr Allan, responding to Mr Bailey’s remarks in a BBC interview yesterday, argued that Tesco bosses have been ‘doing our bit’ to help cash-strapped customers cope.
He explained that although Tesco has to ‘accept the price increases that our suppliers provide’, the firm has been ‘raising prices more slowly’ than its competitors.
The chairman argued that Tesco’s 4p profit margin was ‘very slender’ in comparison to other industries and rejected claims that the grocer was taking advantage of higher prices to increase profits.
Mr Allan also claimed that while he would not make a bold prediction as to when the impacts of the cost-of-living crisis would ease, he does believe the economic situation will improve eventually.
‘Most people expect there will be some easing of inflation,’ he said. ‘I’m not going to be brave enough to forecast how much and when, but it’s likely to go down.’
The ongoing cost-of-living crisis and produce shortages have pushed food inflation to a record-high of 18.2 per cent in February. Pictured: Low stock of fresh fruit and vegetables in Tesco in Ely, Cambs. on February 26
Mr Allan said that although Tesco has to ‘accept the price increases that our suppliers provide’, the firm has been ‘raising prices more slowly than our competitors. Pictured: A Tesco store in Bathgate, Scotland
The chairman’s remarks come as millions of Brits are bracing themselves for an onslaught of surging bills this month.
April 1 was marked by rocketing costs of council tax, water, prescriptions, broadband and mobile bills in a move that economists warn could leave families £700 worse-off each year.
READ MORE: Tesco outrages shoppers by doubling price of a tube of Colgate toothpaste to £5
Those with annual incomes of £12,570 will now see their tax and bills increase by a minimum of £348 a year, while those with an income £50,270 are facing £684 increases, according to the Centre for Economics and Business Research (CEBR).
Families taking in £125,140 annually are also being hit with nearly £1,000 extra cost a year, the study published by the Guardian found.
Meanwhile, average council tax bills will top £2,000 for the first time after an increase by £99.
Many others will juggle even more rising charges at a rate of at least 14 per cent for mobile and broadband services, with Virgin Media increasing some costs by 17.3 per cent and, in extreme cases, 25 per cent.
Water bills are seeing the biggest increase for about 20 years, with the annual cost for an average household hitting £448.
The 7.5 per cent rise means customers is to pay averagely £31 more.
Mr Bailey last month warned businesses against trying to ‘beat inflation’ by passing pain on to consumers.
The BoE governor said pushing up prices risked ’embedding’ problems in the economy and forcing up interest rates.
The comments, in an interview with BBC Radio 4’s Today programme, came after the Bank hiked the base rate from 4 per cent to 4.25 per cent after an unexpected surge in inflation.
Food and non-alcoholic drinks prices rose by 18.2 per cent in the year to February, up from 16.8 per cent in January – with that annual rate now at is highest since 1977.
Retail sales figures underlined the plight being faces by Brits, with the total value of goods bought up sharply over the past year but the volume lower.
Retail sales figures released on May 24 underlined the plight being faces by Brits, with the total value of goods bought up sharply over the past year but the volume lower
Mr Bailey’s comments, in an interview with BBC Radio 4’s Today programme, came after the Bank hiked the base rate from 4 per cent to 4.25 per cent after an unexpected surge in inflation
Mr Bailey did not single out any industry or businesses in his latest remarks, and stressed he had no evidence of profiteering.
But he said: ‘I would say to people who are setting prices – please understand if we get inflation embedded, interest rates will have to go up further and higher inflation really benefits nobody.’
He added: ‘If all prices try to beat inflation we will get higher inflation.’
Mr Bailey said higher inflation ‘really benefits nobody’, adding: ‘It hurts people, and it particularly hurts the least well off in society.’
Source: Read Full Article