Tesco Is Investigating If Food Companies Are Purposely Hiking Costs
According to Kiplinger, December's 6.5% inflation rate marked the sixth straight month the U.S.'s inflation numbers fell. And these statistics reportedly left economists hopeful that inflation will slow to 3.2% by the latter half of 2023. But despite this optimistic economic forecast, the U.S. Department of Agriculture predicts that at-home food prices could increase by up to 4.0% this year. But why?
As CNET reports essential food products like bread, eggs, and olive oil have become noticeably more expensive due to reasons ranging from avian flu to the war in Ukraine. However, Tesco, a chain of British grocery stores, reported to CNBC there's one factor possibly increasing our food costs grocery shoppers may have not accounted for. While you probably curse inflation when you go into your local grocer and find that the ketchup is higher than it was last week, Tesco alleges that some food suppliers are using the current economic crisis as a guise to unnecessarily increase their items' prices. And the company is doing research to prove it.
Tesco is getting to the bottom of the increasing cost of groceries
According to CNBC, after being unable to come to an agreement on product prices, Tesco quit selling several companies' items — including Heinz. However, while Heinz and Tesco did eventually reconcile, the grocery store chain reportedly stopped doing business with many other unnamed food suppliers who it claimed were unwarrantedly raising the cost of their items. And Tesco has assembled a special group that's capable of checking "food input cost against price rises" to combat these companies.
While Tesco is a British chain, another CNBC article reports that this is likely not just a UK-based issue. As the outlet noted, American grocery stores and producers have also been having "tense discussions" about the cost of food. According to the article, these companies are also alleging their product prices are increasing so drastically because the cost of producing goods has gone up.
Although Tesco may discover some eye-opening statistics with its research, CNBC does report that the consumer group Which? notes shoppers should be wary. According to the group, inflation has caused the cost of many grocers' private products to increase much more than their name-brand counterparts. With that fact in mind, Which? stated that grocery stores may be trying to divert consumers' attention by placing the blame for higher costing food on suppliers. Either way, Tesco has not disclosed if it will make its research findings public.