The chairman of Tesco has stated that certain food companies may exploit inflation as an excuse to increase prices beyond what is reasonable.
Laura Kuenssberg asked John Allan if it was feasible that food manufacturers were taking advantage of the lowest members of society, and he replied, “Absolutely.”
He stated that Tesco was exerting “extraordinary” efforts to contest pricing increases it deems to be improper.
Since 1977, food prices, especially milk and cheese, are increasing at their quickest rate.
Mr. Allan stated that all supermarkets challenged cost rises from suppliers when they could and that Tesco confronted businesses that it considered were increasing prices beyond what was required.
Mr. Allan stated, “I believe we work extremely hard to combat price increases.”
“We have a staff that can analyze the composition of food and the prices of goods to determine whether or not these price rises are justified.”
He stated that Tesco’s purchasing teams dealt with this “every day of the week.”
Tesco, which holds a 27.5% share of the grocery market in Great Britain, had “fallen out” with “several suppliers” after “vigorous” negotiations regarding price increases that the store had contested, he said.
Mr. Allan said that the majority of price increases were legitimate.
“There have been significant increases in the prices of commodities, energy, and labor. Alternatively, if you do not like to pay £1.70 for… soup at Tesco or any other store. There are own-label options available “he stated.
Tesco’s John Allan thinks food companies overcharge
In a pricing dispute last year, Heinz beans and tomato ketchup were among the products Tesco briefly pulled from stores. Kraft Heinz stated at the time that its products were growing more expensive to produce.
Following the easing of Covid limitations and Russia’s invasion of Ukraine. The cost of life has progressively increased for millions of individuals.
Inflation, which gauges the rate of price increases, decreased from 10.7% in November to 10.5% in December. But remains at levels not seen in forty years.
According to the Office of National Statistics, food costs grew 16.8% annually through December (ONS).
Milk, cheese, and eggs suffered the greatest price hikes. Additionally, prices for jam, honey, and chocolate rose. However, the price growth of bread and grains slowed.
The consumer group Which? has also monitored how much major shops have increased their pricing relative to their rivals.
The association reported that Tesco ranked sixth among supermarkets with the largest price increases.
The supermarket food and drink inflation tracker of Which? monitors the annual price increases of tens of thousands of food and drink products over three months at eight major supermarkets: Tesco, Sainsbury’s, Asda, Morrisons, Aldi, Lidl, Waitrose, and Ocado.
It was discovered that despite being the cheapest supermarket overall, Lidl’s prices increased by 21.1% in December since the same time the previous year, followed by Aldi at 20.0%.
