Tesco’s Chairman John Allen has highlighted that some of the supermarket’s customers are “extremely stretched” and were starting to ration the amount of food they buy.
Speaking on BBC Radio 4’s Today programme, he said the country was facing “real food poverty for the first time in a generation” and that people were finding it even harder to mitigate soaring energy costs.
“I was hearing for the first time for many years of customers saying to checkout staff: ‘stop when you get to £40’, or something,” Allen said. “They don’t want to spend a penny over that, as opposed to having everything checked out.”
He noted that Tesco surveys of its customers had shown that inflation was the principal concern and that people who had never used a food bank before were having to resort to one.
“So I think a lot of people are feeling, you know, something of a pinch and lots of people are actually feeling extremely stretched,” he added.
Allen stated there was an “overwhelming case” for a windfall tax on energy companies to help those suffering the most from the cost of living crisis.
Boris Johnson has argued against such a tax, saying it would discourage companies from investing in energy infrastructure and renewable sources that would lead to lower energy prices in the long run.
However, Allan said: “They are expecting it [a tax], and they wouldn’t be much fazed by it. It should be short-term only.”
Earlier this week, economists warned that the squeeze on British households from high inflation could be bigger and last longer than expected, amid a series of economic shocks from Brexit, Covid and Russia’s war in Ukraine.
Michael Saunders, a member of the Bank of England’s rate-setting monetary policy committee (MPC), said inflation was now “uncomfortably high” and he was concerned the higher level could become entrenched for longer than hoped. Last week, the independent economist voted for a bigger rise in borrowing costs than most of his MPC colleagues.
His warning was echoed by Andy Haldane, the Bank’s former chief economist, who said high rates of inflation could stick around for “years rather than months”.
Haldane, who was among the most prominent economists to sound the alarm on inflation risks before he quit the Bank last year, told LBC radio station that he wished tougher action had been taken sooner.
