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The UK is “over the worst” of hovering food price inflation, in line with the head of Ocado, however the on-line grocer warned that it will take time for costs to average.
Tim Steiner, the group’s chief govt and co-founder, stated rate of interest rises, larger mortgage prices and better wages would proceed to place stress on costs. But he added: “We are definitely over the worst in my opinion.”
“I think we need to see interest rates ideally stabilise and come down before we can start to see that inflation will actually start to go back down. But I don’t see it going up from where it is now,” he stated on Tuesday.
Steiner’s view that inflation has peaked follows comparable remarks from different retail executives, elevating hopes that the UK — which has skilled western Europe’s highest fee of food inflation — will lastly see some reduction.
Tesco chief govt Ken Murphy just lately stated he believed “we’re past the peak inflation” whereas J Sainsbury head Simon Roberts said earlier this month that “food inflation is starting to fall”.
UK grocery price inflation eased for a fourth consecutive month in July, in line with information published by analysis firm Kantar. The annual tempo of grocery price inflation eased to 14.9 per cent in the 4 weeks to July 9, down from 16.5 per cent in the earlier month.
Steiner’s remarks got here as Ocado reported earnings earlier than curiosity, taxes, depreciation and amortisation of £16.6mn for the six months to May 28. The group stated its know-how enterprise had been worthwhile for the first time.
Revenue elevated by 8.6 per cent to £1.37bn. Ocado shares rose 19 per cent on Tuesday.
The firm nonetheless recorded a pre-tax loss of £289.5mn, up 37 per cent yr on yr, however caught to its annual steerage. Its shares have misplaced two-thirds of their worth over the previous two years, after hitting a file excessive throughout the pandemic-driven increase in on-line procuring.
Ocado runs a web based grocery store in the UK in partnership with Marks and Spencer and likewise sells its technology to different retailers round the world to allow them to promote items on-line.
Steiner pushed again at ideas that retailers had been elevating costs past the heightened enter prices of uncooked supplies and wages.
“When you look at the overall margins to the sector, I think calling it profiteering is really not sensible,” he stated, including that the sector had to deal with considerably rising commodity costs in addition to power and labour prices.
“I think grocers have worked enormously hard as a sector to keep those price rises to a minimum for the UK consumer,” he stated.
Ocado shares surged final month after rumours that it could possibly be a bid goal for Amazon.
“Speculation is speculation,” stated Steiner. “Whenever any offer comes, as a management team and board I’ve got responsibilities to take this seriously.”
“But it’s not something I’m out pursuing,” he added.
