Ocado’s chief executive Tim Steiner has blamed Chancellor Rachel Reeves’s tax rises for pushing up the price of groceries, warning it is “unrealistic” to expect businesses to absorb significant increases in labour costs without passing them on to consumers.
Speaking after the UK’s annual inflation rate rose to 3.6% in June, Steiner said the combination of higher employer National Insurance Contributions and a 6.7% increase in the minimum wage was fuelling price pressures in food retail and distribution.
“Am I surprised to see inflation coming through? Of course not,” he said. “You can’t increase the cost of labour in food production, food distribution and food retailing in the way that we have, with National Insurance increases and the minimum wage increases, and not expect to see prices move. That would have been a wholly unrealistic expectation if anyone had that.”
Food inflation ticked up from 4.4% to 4.5% in June, compounding the impact on households already grappling with rising grocery bills.
Retailers and industry groups have warned that the fiscal measures announced in Reeves’s autumn budget—including a £25 billion hike in employer NICs—would inevitably lead to higher prices on the shelves, as companies pass on increased labour and input costs.
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