Food prices will keep rising, warns Asda chairman

Food prices will keep rising, and stay higher “for quite some time”, Asda chairman Lord Rose has said, citing high cost of raw materials due to war in Ukraine and a resurgence of Covid in China.

Speaking to the BBC Sunday Morning programme, the Asda chairman said he feared that food prices “are going to go higher, and they are going to stay high for quite some time”.

“Chicken feed is going up, and all the other associated costs are going up. I see no quick solution to this.

“Pasta is made from durum wheat, and durum wheat has gone up in price, so that’s an inevitable cost increase,” he said.

Admitting Lord Rose said retailers “will do what we can” to shield customers from raw materials cost increases, but added they were “not immune from cost increases ourselves” and would pass them on.

“If you’re baking biscuits or baking cakes, [energy] goes into the cost of the raw material that you have to pass on [to consumers],” he said. “What we have to try and do is mitigate that.”

There is a danger of long-term effects on the economy from high inflation including “a wage spiral” and “stagflation” – where prices and wages go up, but the economy doesn’t grow.

“They are both evil, and the government has got a very difficult and tricky road to navigate,” Lord Rose said.

He added that 90 percent of Asda customers were “very worried about the cost of living, and how they are going to make ends meet”.

Many families struggling with the cost of living crisis are “going to suffer”, the Conservative peer warned – although retailers will try to keep costs down.

The Bank of England expects price inflation to hit 8 percent this spring.

Meanwhile, Co-op chief executive Steve Murrells told the Sunday Times that chicken could become as expensive as beef due to the increasingly rising feeding cost owing to war in Ukraine.