Reuters – Britain’s biggest supermarket group, Tesco, has cut the price of milk for the first time since May 2020, a possible early sign that a surge in food inflation may abate in coming months.
In March, grocery inflation in the U.K. rose to 17.5 per cent, according to market researcher Kantar. The price rise was fastest for products such as milk, cheese and eggs. Overall, inflation for food and non-alcoholic drinks was 18 per cent in February, the highest since 1977, according to official data.
Tesco, which has a 27 per cent share of Britain’s grocery market, said on April 12 that it was reducing the price of a four-pint carton of milk six per cent from C$2.77 to $2.60. The cost of a two-pint carton is set to decrease four per cent, while consumers can expect to pay just over five per cent less for a pint of milk.
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“We’ve seen some cost price deflation for milk across the market in recent times, and we want to take this opportunity to pass that reduction on to customers,” said Tesco U.K. CEO Jason Tarry.
The company has said the cut will not affect the price-point at which Tesco pays farmers who supply its milk.
Tesco also said it was “locking in” prices on more than 1,000 everyday products until July 5, including Yorkshire tea, McCain oven chips, Shredded Wheat, Kenco instant coffee and Aquafresh toothpaste.
Overall, U.K. consumer price inflation ran at 10.4 per cent in February, official data showed, pushed up by higher food and drink prices in pubs and restaurants.
The Bank of England forecasts it will fall sharply during the current quarter, dropping to below four per cent by the end of this year.
Tesco was expected to report full year results on April 13.
