Tesco chair warns of further inflation with ‘the worst yet to come’

The supermarket boss told the BBC’s Sunday Morning programme the “worst is yet to come”.

He added that he was aware that some people are currently being forced to choose between food and heating, which he said “troubles us and I’m sure troubles many people… that’s clearly not a situation that any of us should tolerate”.

Allan estimated that prices could rise by 5% as Tesco and its suppliers are hit by rising energy bills. He said Tesco has so far contained its price inflation at around 1%.

Overall, annual UK inflation stands at 5.4%, a 30-year high, and is expected to top 7% this year, while soaring energy prices and other costs will hit the lowest income households.

Allan said: “I think the combination of increasing energy prices, the impact of National Insurance increases [in April] on people’s incomes and to a much, much lesser extent increasing food prices, is going to squeeze the hardest-up still harder.”

He also said supermarket prices had been impacted on a product-by-product basis with items such as coffee rising in price, while a tin of own-brand baked beans is cheaper than it was five years ago.

Allan added: “As far as Tesco is concerned, we have 2,100 products on our lowest price. We’re either price matching against Aldi or it’s our own Exclusively at Tesco range. That number [of products] has been increasing in recent months rather than decreasing.”