Chancellor Rachel Reeves is set to meet senior supermarket executives today, after an earlier attempt to convene the sector was abandoned following a poor response from retailers.
The rescheduled Downing Street meeting is expected to be attended by bosses from Tesco, Sainsbury’s and Morrisons, as the government looks to assess the potential impact of rising energy, fuel and fertiliser costs on food prices and the wider cost of living.
Executives from Asda, Aldi and John Lewis are not expected to attend, reportedly due to diary clashes, while Marks & Spencer and Lidl had yet to confirm.
The initial meeting, arranged last week, was called off after only Morrisons chief executive Rami Baitiéh was understood to be available to attend. The move came amid industry concern that supermarkets were being summoned to defend themselves against suggestions they were benefiting from higher prices linked to disruption in the Middle East.
Retailers are now expected to use the meeting to push back against any suggestion of profiteering and instead highlight the domestic cost pressures continuing to weigh on the sector.
According to reports, grocers want discussions to focus not only on the impact of the Iran crisis on supply chains and input costs, but also on the policy measures government could take to ease pressure on retailers, suppliers and producers.
The meeting follows similar tensions between government and retailers over fuel pricing. Earlier this month, a meeting between Reeves and petrol retailers was also disrupted after the trade body representing the sector criticised the Chancellor’s language around alleged “price gouging”.
Asda executive chair Allan Leighton last week urged the government to “start doing stuff” to support farmers and reduce fuel costs, dismissing suggestions of profiteering as “nonsense”.
The talks come as the latest data from the British Retail Consortium showed shop price inflation rose modestly to 1.2 per cent in March, up from 1.1 per cent in February.
BRC chief executive Helen Dickinson said retailers would work with suppliers to limit the impact on consumers where possible, but warned inflation would continue to rise.
She said: “While retailers will work with their suppliers to mitigate the impact on prices as far as possible, inflation will rise, although there are no indications it will reach the peaks of the last spike in April 2023.
“Government needs to look at all the costs that could exacerbate these price rises.”
There is also growing concern among food producers about the effect of rising input costs on supply. Growers have warned that higher energy bills could force some to cut production, raising the risk of shortages in categories such as salad vegetables later in the season.
Industry bodies representing poultry producers and growers have also signalled that, while some cost increases may be absorbed, others are likely to be passed on to consumers if pressure persists.
The government has said the meeting is intended to be a fact-finding exercise, aimed at understanding potential supply disruption and the likely effect on household costs in the months ahead.
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