I found it a bit ironic to read today the words of Tesco chairman John Allan claiming that some food suppliers are ‘hiking their prices’ further than neccessary.
Some food firms may be using inflation as an excuse to hike prices further than necessary, the chairman of Tesco has said.
Asked by the BBC’s Laura Kuenssberg if food producers were taking advantage of the poorest in society, John Allan said it was “entirely possible”.
He said Tesco was trying “very hard” to challenge price hikes it thinks are illegitimate.
Food costs including milk and cheese are rising at their fastest since 1977.
Mr Allan said all supermarkets were challenging cost increases from suppliers where they could – and Tesco was confronting companies it believed were increasing prices beyond what was necessary.
“We do try very hard to challenge [price hikes], I think,” Mr Allan said.
“We have a team who can look at the composition of food, costs of commodities, and work out whether or not these cost increases are legitimate.”
He said it was something Tesco’s buying teams were dealing with “every day of the week”.
“Food firms raising prices unnecessarily, Tesco’s John Allan says” – BBC News, January 22nd 2023
Now I don’t have much sympathy for the ‘big brands’ which are owned by multi-national corporate giants, who I am pretty sure ARE taking full advantage of the current situation, and while production costs may have increased, are increasing prices in order to maximise their own profits.
The ‘big supermarkets’ here in the UK (Tesco, Sainsburys, Morrisons, Asda etc) have for years been heavily competing against each other in order to be deemed the ‘best value’ retailer, under pressure from the likes of Aldi and Lidl.
There was a ‘race to the bottom’, and the big supermarkets, much as Amazon still does, would ‘squeeze’ manufacturers and suppliers on their wholesale prices. This notably began to come to an end a few years back, when the big supermarkets stopped their ‘price-match’ practices, and interestingly came to a halt just prior to the Covid pandemic outbreak.
For the big corporate ‘brands’, this is all pretty much ‘payback time’. Tesco may have had public ‘fallings out’ with the likes of Heinz over the price of soup and ketchup, but ultimately let the consumer make their own choice.
Tesco (and other supermarkets’) own brand products have also increased in price of late, and this will also be down to those manufacturers facing their own production costs increasing.
Any ‘shortages’ being faced by these big supermarkets is down to them being unable to screw down their suppliers on price, especially the smaller ones. Much has been said about shortages of eggs for example, yet my local independent supermarkets and convenience stores where I live have plenty of stock, and the price offered isn’t much more than what Tesco or Morrisons would charge, and is still affordable to me.
For many years, I have avoided buying products from ‘big brands’, preferring to buy the ‘own brand’ or cheaper brand product, and while many years ago there did used to be discernable differences in quality, most of the time now there is very little. I’m pretty sure in most cases, most general grocery items are all produced in the same factory, and at the end of the day, you’re just paying more for the ‘brand name’.
So yes I do believe that some companies are taking full advantage of the situation to hike up prices, but equally the likes of Tesco want to shut the fuck up, because for years they have been screwing down manufacturers/producers for the ‘best’ wholesale price in order to maximise their own profit margins, while also attempting to kill off your local independent shops by driving them out of business, using ‘perception management’ techniques that make people think only the ‘big supermarkets’ offer value for money.
Which?’s supermarket food and drink inflation tracker records the annual price rises of tens of thousands of food and drink products across three months at eight major supermarkets – Tesco, Sainsbury’s, Asda, Morrisons, Aldi, Lidl, Waitrose and Ocado.
It found that despite being the cheapest supermarkets overall, Lidl’s prices went up the most in December at 21.1% since this time last year, followed closely by Aldi at 20.8%.
Lidl and Aldi are not your friends and saviours either, despite what the media might tell you.
On a final note, and where I think Tesco are a little hypocritical, is that in the image used on the BBC article linked to above, you can see they offer ‘cheaper’ prices to their customers who have ClubCards.
Two-tier pricing? Why should certain items be offered ‘cheaper’ to ClubCard holders than to ‘infrequent’ shoppers who might just be passing by?
