McKinsey’s head of UK consumer business Bogdan Toma said UK food and beverage
inflation has fallen to 1.3%, the weakest in about five years, a level he views
as unsustainable for retailers operating on low-single-digit margins. He said
retailers are absorbing a large share of rising costs amid weak consumer demand
and price flattening, compressing margins and creating mounting tensions that
need to be resolved. Toma added that hot weather and supply-chain disruptions
for many farm products could put upward pressure on food prices this autumn.
