The price of your weekly food shop is only going in one direction – up

Supermarket chains can hardly plead poverty, but tight margins mean food price inflation will inevitably be passed onto consumers, says Ben Chapman

Tesco’s John Allan said the worst of rising food prices is ‘yet to come’ (Andrew Milligan/PA) (PA Archive)

The weekly food shop is where many of us feel the pinch of rising living costs most acutely, and the pain is about to get a lot worse, according to supermarket bosses. Higher costs for energy, shipping and wages are all feeding into the rising prices that big retailers pay for goods. That could lead to a 5 per cent jump in grocery prices this spring, said Tesco chair John Allan.

The boss of industry lobby group the British Retail Consortium echoed those sentiments, arguing that businesses were doing what they could to keep prices low. When asked if retailers should take a hit to their profit margins in order to curb prices for customers, Helen Dickinson told BBC Radio’s Today programme: “I think we’re already seeing quite a lot of that – I mean we saw lots of that during the course of the early days of the pandemic where profits were deflated and I certainly think the context, certainly for retail businesses, particularly in food, is they absolutely monitor prices almost on a daily basis.”

It might be the source of some annoyance to hear one of the country’s largest companies, boasting billions of pounds of revenue, plead that it has no choice but to pass on price inflation to customers. Supermarkets have not done too badly from the pandemic, after all. In January, sales were up 8 per cent on pre-pandemic levels. Couldn’t shareholders take a hit for once? Perhaps. But the Tesco chair has a point.