Ocado blames Reeves’s tax rises for higher food prices amid inflation uptick

Tim Steiner, CEO of OCADO, blamed the high taxes on Chancellor Rachel Reeves to pay the grocery price, and warned that it was “unrealistic” to expect companies to absorb great increases in employment costs without transferring them to consumers.

Speaking after the annual inflation rate in the United Kingdom increased to 3.6 % in June, Steiner said a mixture of national insurance contributions to employers and an increase of 6.7 % in the minimum wage was nourishing price pressures in the fragmentation of food and distribution.

He said: “Have you been surprised to see the inflation coming? Of course not.” “You cannot increase the cost of employment in food production, food distribution, and retail foods in the way we have, while increasing national insurance and minimum wages, and you do not expect to see prices move. This may be a completely unrealistic expectation if anyone had it.”

Food inflation increased from 4.4 % to 4.5 % in June, which increased the effect on families who already wrestling with the height of groceries.

Retail and industrial groups have warned that the financial measures announced in the Rivs budget in the fall – including an increase of 25 billion pounds in NICS for employers – will inevitably lead to high prices on the shelves, as companies are going through increased costs of employment and inputs.

Despite the pressure, Steiner insisted that Ocado Retail – the joint grocery project online with Marks & Spencer – is working to keep prices under selection.

The average value of the customer basket increased by only 0.7 % to 124.19 pounds in the six months until June 1, which the company said reflected an increase of 1.4 % in the average rate of elements, much lower than the national food inflation rate.

“It is not good to make people more expensive,” Steiner said, referring to the increased costs that employers face now.

His comments come at a time when the OCADO group reported a sharp shift in its financial results, as it achieved a profit of 612 million pounds for the first half of the year, compared to a loss of 153 million pounds during the same period in 2024. The swing was largely driven by re -evaluating its share in Ocada Retail.

The revenues in the group’s technology solutions, which sell warehouse automation systems to global retailers, increased by 13.2 % to 674 million pounds. Sales in the retail department in Okado increased by 16.3 % to 1.53 billion pounds, although the unit recorded a loss of 25 million pounds after the tax.

Industry experts have repeated Steiner’s warning that the high costs of inputs reach retailers in all fields. “

“Pressure on food and drink manufacturers remains in construction. With many major components such as chocolate, butter, coffee, beef and price climbing – along with high energy expenses and employment – these increased costs gradually make their way to prices that shoppers pay in tricks.”

Steiner also dealt with the continuous payment dispute of 190 million pounds with Marks & Spencer, and described the dialogue as a “building”. I have blocked M&S in a legal row on the unparalleled performance targets related to the joint project.

“We have a very strong working relationship with them and have spent a lot of time with them in the past few weeks,” Steiner said.

He added that Okado witnessed “minimum, if any” from the electronic attack that recently affected the M&S systems.

Investors welcomed the results, as they sent OCADO shares more than 12 % when the markets opened on Thursday.

As inflation, taxes and wages continue to pressure the margins, the political and economic pressure on the government is escalating – especially since the high food prices directly affect millions of consumers and voters. With the growth of speculation about further financial emphasis in the upcoming budget of the advisor, retailers warn that the ability to withstand costs may become the next crisis in the high streets of Britain.