Tesco boss says there are ‘encouraging early signs’ food inflation is easing
TESCO’S boss has spotted “encouraging early signs” that food inflation is easing.
But Ken Murphy warned it is unlikely prices will soon drop back to where they were.
The chief executive of Britain’s biggest retailer said that the price of milk, bread, cooking oil and some vegetables is now falling.
But the cost of other food is staying stubbornly high after poor harvests and rising wages and energy bills.
Food inflation remains at 19 per cent — helping to push Tesco’s sales up nine per cent in the three months to May 27.
But Mr Murphy hit back at accusations of “greedflation” and said Tesco had “led the way in cutting prices”.
The supermarket chain does not expect to grow profits this year as it absorbs inflationary pressures.
Its larger stores benefit from households buying more in bulk to save cash — plus batch-cooking meals and packed lunches.
Mr Murphy echoed industry opposition to a government price cap on grocery essentials.
He said: “Market forces mean UK grocery retailers are constantly having to be the sharpest possible in terms of value.”
France has adopted a price cap for essential groceries.
Mr Murphy urged our government to lower costs by removing red tape.
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