UK supermarkets will have to increase prices in the years ahead, according to Tesco chief executive Philip Clarke.
His views come alongside a new poll, by YouGov and the Prince's Countryside Fund, claiming British shoppers are now willing to pay more for food products that they feel are directly beneficial to farmers. More than 80 per cent of respondents said it was important to buy British fresh produce.
'‘There was a time when we could go to South Africa to buy fruit and be the only retailer there, but not any more,' said Clarke.
Clarke believes that the UK is not producing enough food to satisfy growing demand. He warned: 'Because of growing global demand, everything is going to change.There's going to be more demand and more pressure.
'Unless more food is produced, prices must go up. It's the basic law of supply and demand.'
Tesco is currently upgrading its promotional activities within fresh produce with the Love Every Mouthfulcampaign. The new initiative will advertise fresh produce more effectively within stores, with customers offered samples on all products. However, some analysts believe that Clarke's comments signal an end for widespread bargain buys and that the new campaign, which focuses on advertising the sourcing and quality of products, is designed to persuade consumers to pay more.
Clarke isn't the first boss of a UK supermarket to suggest food prices could rise; Waitrose MD Mark Price suggested in an interview earlier this year that inflation would be prominent on food prices over the coming years . He said: 'It is likely that food inflation will continue to rise for the foreseeable future. In some commodities, the increases will be massive. It’s bread, vegetables, all produce.
'The apple crop was down 20 to 30 per cent so apple prices have to go up. You have only seen the tip of the iceberg. It is impossible to say how long it will last.'
According to Kantar Worldpanel, food price inflation was 2.7 per cent last month, up from 2.4 per cent in May.
Meanwhile,Donald Curry, a trustee of thePrince's Countryside Fund, echoed Clarke's comments, but insists that supermarkets must guarantee that higher prices will benefit farmers if retailers are to justify anincrease successfully. He said: ‘'The public are prepared support British farmers, even if that means paying more for food – provided extra money goes directly to the producer.'
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