'It's tough for customers right now': Morrisons boss sounds alarm over impact of war on food prices
The boss of Morrisons has said the supermarket is ‘alert’ to the war in the Middle East and says it is 'tough' for consumers.
Morrisons chief executive Rami Baitiéh said: ‘We know it’s tough for customers right now and we’re doing everything we can to offer them better value and give them more reasons to shop at Morrisons.’
He is the latest chief executive to sound the alarm over the impact of the Iran war, as a report predicts that food inflation could rise to over 8 per cent by June if the conflict continues.
He said: ‘We are watching current international events closely, alert to the impacts on consumer confidence and supply chains, and we will continue to do what we can to mitigate effects on our customers.’
Baitiéh said the group was operating in a ‘highly competitive market’, as he attempts to steer a turnaround after the firm lost ground to its discount rivals.
Experts have warned of a ‘calm before the storm’ on food price inflation and said shoppers will start to see price increases in the coming months.
It comes as there have been warnings over increases to energy and food bills from this summer.
Food and soft drink prices rose by 3.3 per cent in the year to February, according to the Office for National Statistics - down from 3.6 per cent in January.
But experts have warned this was ‘the calm before the storm’ and shoppers will start to see the impact of the war at the tills in the coming months.
Karen Betts, chief executive at the Food and Drink Federation (FDF) said: ‘The longer the conflict in the Middle East goes on, the bigger its impact will be on food prices. With food and drink price inflation already running above historical averages, heightened energy, maritime fuel and fertiliser costs will put further pressure on prices.
'While it can take several months for cost rises to filter fully through to shop shelves, the cost of the Iran conflict will be felt by shoppers this year,' she warned.
The Institute of Grocery Distribution has warned that a shock spike in energy bills could end up heaping an extra £150 to the average household’s annual grocery bill.
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The Government must provide the food sector with 'at least the same support as other manufacturing sectors', in order to tackle the rocketing cost of living, Betts said.
In a trading update, Morrisons said it was seeing ‘some momentum’ after ‘pleasing performances’ at Valentine's Day and Mothers Day and was ‘now looking forward to Easter’.
In an update for the 13 weeks to 25 January, which included Christmas, Morrisons said total sales grew 2.6 per cent to £4.1billion.
There are fears Morrisons could soon lose its place as the UK's fifth biggest supermarket to cut-price Lidl. The retailer has already been elbowed out of the top four by discounter Aldi.
It has struggled since it was taken over by private equity a few years ago. The retailer's stock system was also thrown into chaos in November 2024 when its supply chain software provider Blue Yonder was hacked.
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