The chairman of Tesco, the UK’s largest retailer, says he cannot predict when food price increases will peak.
But John Allan said the supermarket is “doing our bit” to help customers cope with the effects of high inflation.
Fresh produce shortages helped push food inflation to 18.2% in February, the highest since 1978.
Amid the cost of living crisis, Mr Allan wants the government to expand free school meals in England as too many children are starving.
He said rising food prices meant there were people who were “very, very, very pressured”, adding that Tesco was trying to help customers cope by showing them ways they could save .
Looking ahead, he said: “Most people expect inflation to ease off a bit. I won’t be brave enough to predict how much and when, but it will likely go down.”
In an extensive interview, Mr Allan also denied that Tesco was taking advantage of higher prices to make bigger profits.
He said Tesco’s 4p-a-pound profit margin is “lean” compared to other industries.
Mr. Allan supports Bite Back 2030, a youth-led charity campaigning for a fairer food system.
“I am deeply concerned personally about the return of child poverty in the UK,” he told the BBC, saying that growing up he saw children suffering because they lived in poverty.
“I think the reasons for worrying about this are mostly moral, they’re not economic.”
To qualify for free school meals in England, a household with no benefits must not have an income in excess of £7,400.
But it is believed that there are around 800,000 children whose parents earn just above that and come up short.
- How many children get free school meals?
Extending free school meals to all families receiving universal credit should be one of the top priorities for ministers amid the cost-of-living crisis, Allan said.
A spokesman for the Department of Education said: “Over a third of pupils in England now receive free school meals in educational establishments, compared with one in six in 2010 and we have made a further investment in the National School Breakfast Program to expand the programme another year, backed by up to £30m.”
The Governor of the Bank of England, Andrew Bailey, recently suggested that companies should think twice before raising prices to cope with rising costs, which could push the cost of living even higher.
“By and large, we have to accept the price increases from our suppliers. All the evidence I’ve seen suggests that Tesco is raising prices more slowly than our competitors,” Allan said when asked about the governor’s request to businesses.
He has faced backlash over recent comments that appear to have accused suppliers of profiting from inflation.
But Tesco’s own earnings will be in the spotlight in a few weeks when it reports its full-year results.
Mr Allan said he could not comment on expected figures but hit back when the company was making too much money at the expense of customers.
“Anyone who thinks four pence a pound as an excessive profit margin would like to chat with me because that’s a very, very meager rate of return compared to most other industries.”
Although sales were “obviously high,” he insisted there was still work to be done to “maintain” the store and invest.
Tesco has faced an outcry from suppliers over plans to impose new fees for selling products online. Mr Allan said the company works “constructively” with suppliers.
“We have always made it clear that this is a voluntary program. We have taken great care to ensure we meet the requirements of the Food Code Arbitrator.
“We’ll just have to wait and see what the outcome of these discussions is.”
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