// Tesco starts pushing suppliers for price cuts as inflationary pressures start to ease
// The supermarket giant is keen to reduce prices where it believes pressures have eased
Tesco has started to push its suppliers for price cuts in an early sign that climbing weekly shop costs will start to slow.
The supermarket giant, which has a team monitoring the costs facing suppliers, is keen to start reducing prices for shoppers on certain products where it believes inflationary pressures have eased, The Sunday Times reported.
“Tesco are trying to lead the supermarket industry on deflation. They are asking for price reductions — but suppliers want price increases,” said Ged Futter, director at consultancy firm The Retail Mind.
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Food inflation hit a 45-year high of 18% in February, above the inflation rate of 10.4%, meaning consumers pay an average of 23% more for a basket of Easter staples than a year ago.
“The pressure on suppliers to decrease prices is going to come thick and fast,” said David Sables, head of supplier consultancy firm Sentinel Management Consultants.
“Supermarket buyers are flagging that they expect prices to be brought down, but it’s early days. Prices won’t drop in a straight line.”
Tesco chairman John Allan said in January it was “entirely possible” that food producers were taking advantage of the poorest in society by using inflation as an excuse to increase prices beyond what was necessary.
Last month, the supermarket chain faced backlash over its plans to introduce a supplier fee to help cover the rising costs of operating online.
A spokesperson said: “We are committed to fair and transparent partnerships with our suppliers, and for seven consecutive years suppliers have voted us No 1 retailer in the independent Advantage survey. We are working hard to keep the cost of the weekly shop as affordable as possible.”