A price hike is round the corner for the English supermarket chain Tesco. John Allan, the chairman of Tesco indicated that the supermarket might consider a price hike owing to the weak pound. Grocery store prices are “likely” to ascend, said John Allan in an interview with BBC radio. He has faulted the weak sterling, which has fallen 16% against the euro and 19% against the dollar since the EU submission result in June.
Post Brexit referendum the Pound has been weakening and the cost of importing food and other ingredients are mounting, he said. “We are trying to defend our customers from unjustified price increases, but it is likely there will be some price increases going forward,” Allan added.
The drop in the pound is probably going to affect inflation figures. Inflation right now remains at 1%, however Allan trusts this will ‘move up’ to 2-3% – with food prices the primary driver. Some industry experts forecasted a price hike of 10 percent or even 20 percent. However Allen said rises would be “significantly less”. Tesco was in the news recently over a fight with Unilever after the provider allegedly attempted to compel the supermarket to force a 10% rise on the cost of items it supplies.
Allan also likewise cautioned that Theresa May ought to be watchful of immigration controls which could hurt 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.”