Increasing food prices will be ‘lethal’ for millions of struggling customers and the higher grocery bills will mark damage to consumers, economy and ultimately the business, Matt Davies, UK CEO of Tesco commented. Speaking at the industry conference IGD the other day, he told that the market giant would do anything to make sure the food inflation is kept to minimum.
The giant had a spark with major supplier Unilever last week after it tried to have a 10% rise in its prices for top selling brands which includes Marmite. All our partners are aware about the damage in inflation and are working constructively to deal with the same he added. Meanwhile CEO of Sainsbury’s Mike Coupe told that while the pound’s devaluation was inflationary, there were deflationary pressures because of commodity price movements. He added sense to the same by noting that Britain’s big supermarket groups operate in a universal market where supply and demand constantly adjusts.
Chartered economists believe that food prices are set to rise as the pound has fallen 18 per cent against the dollar and 14 per cent against the euro since Britain voted in favour of leaving the EU in June, making importing goods more expensive. Nearly half of the food Britain consumes is imported. It also reflects deflation in some major categories such as detergents, bacon and crisps.