Worst of rising food prices ‘yet to come’, warns Tesco boss

The worst of rising food prices is “yet to come” with a potential 5 percent surge in spring, stated recent reports citing chairman of Tesco.

Tesco Chairman John Allan said food prices in the supermarket giant’s rose only 1 percent last quarter but are likely to be rising by 5 percent by the Spring.

He admitted some people will “of course” have less to spend on luxuries, as it comes at the same time as a National Insurance hike and a £693 rise in the average family’s annual energy bill, to £1,971.

“Food is a relatively small part of household spending, it’s only about 9 percent, that figure has halved in the last half century,” Allan said, speaking on the BBC’s Sunday Morning programme.

“But of course, it’s a bigger proportion for those on the lowest incomes,” he added.

“And in some ways, the worst is still to come because although food price inflation in Tesco over the last quarter was only 1 percent, we are impacted by rising energy prices; our suppliers are impacted by rising energy prices.

“So the likelihood is that that inflation trigger will rise but we’re doing all we can to offset it.”

“I predicted last autumn that food prices by the spring might be rising about 5 percent.

“I sincerely believe that it’s not going to be any more than that, it might even be slightly less, but that’s the sort of number we’re talking about.

“But of course 5 percent, if you’re spending – as some of the least well-off families are spending – 15 percent of your household income, is significant.”

Allan, however, insisted the supermarket chain brings down prices where it can with the cheapest tin of beans now 22p, down from 25p five years ago.

Allan’s statement came as business secretary Kwasi Kwarteng ruled out to Sky News the prospect of the government cutting VAT on energy bills to provide further support as the cost of living continues to rise.