Worst 'yet to come' for food price rises that could last over a year - Ex-Sainsbury's CEO
19 June 2022, 15:50
'The worst is yet to come' for food price rises
Former CEO of Sainsbury's Justin King has said "the worst is yet to come" for food prices which will see "double digit" inflation likely lasting for longer than a year.
It comes as grocery analysts warn food prices could rise by 15% over the summer and leave more shoppers skipping meals due to "food stress".
The Institute of Grocery Distribution (IGD) said in a report that households are set to pay more for essentials including dairy, bread and meat as recent inflation looks set to grow further.
IGD have reported that factors including uncontrolled increases in labour costs, trade disruptions caused by Brexit and the weakening of the sterling against other currencies could be behind the rising inflation rate.
Mr King, who currently sits on the board of Marks and Spencers Food, told Swarbrick on Sunday: "We are going to see very significant food price rises and the worst is yet to come.
"It was my view, expressed publicly 6 months ago when the Bank of England felt that it would be around 5% and relatively short lived, that it would be closer to 10% and long-lived, and I think we're seeing that even I was under-calling it.
"We're definitely going to see double digit food inflation, and I think very likely it will persist for a longer period of time than just a year or so."
'We're going to have to spend a greater proportion of our budget.'
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When asked why he thought there would be such a rise in food prices, Mr King said part of the rise was because the UK buys a lot of food in euros and dollars and the pound is "weak at the moment", which impacts on inflation.
"The impacts of energy price rises, and the very significant impact on availability of core commodities such as oil and wheat, and so on... they haven't found their way through the food price system yet," he said.
"They are working their way through to prices and will be very significant."
Mr King added that pay rises for those in the food industry will "flow through" to higher prices too.
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