Iceland boss says price rises ‘inevitable’

Richard Walker, managing director of the grocery chain Iceland has said supermarket price rises are “inevitable”.

In an interview with BBC Radio 4’s Today programme this morning, he said: “I think it is inevitable that you will see price rises.

“The UK supermarket industry is one of the most competitive in the world. Our margins are very very tight, and we are not an endless sponge that can absorb all these different cost increases, so I would say that unfortunately price rises are inevitable, and we are starting to see that already in the market.”

He explained: “At Iceland, we will be looking at our electricity bills going up by £20 million next year. That is simply a cost that wasn’t there last year. Every supplier is after price increases because of the pressure that they are facing in their supply chain. We have just increased our HGV pay by £12 million per year. We have got environmental packaging taxes, which I am a big supporter of, of £10 million per year next year, that wasn’t there.”

Referring to these factors as a “double-ended problem”, Walker said, “All of these cost pressures are coming just at the time when they will be withdrawing the £20 Universal credit allowance which some of our customers really rely on”.

In a reference to some of the tough-talking on business during the Conservative party conference this week, he said, “Iceland is a relatively big company and we will get through it. But of course, it is not the case for a lot of smaller businesses, businesses without cash reserves, and I think this is a moment when tough rhetoric is really not helpful”.