Asda chair Lord Stuart Rose believes the government should consider reducing VAT or further cutting fuel tax to help ’kill’ inflation, which is prompting shoppers to limit their spending.
Rose told the BBC that such measures would be “helpful” and that more should be done to ease the burden on low income households. He made his comments just before the latest ONS data revealed that UK inflation had reached 9.1% in May – a 40-year high just ahead of the 9% recorded in April.
Rose said: “People are trading back. They are worried about spending. They’ve got a limit that they’ve set out, too. They say £30 is one limit…and if they get to more than £30 then that’s it, stop. It’s the same with petrol.”
Asda’s latest disposable income tracker showed that in May households had, on average, £44 less a week – a decline of approximately 18% year-on-year.
Asda has sought to offer shoppers value through initiatives such as the launch of its Just Essentials range and price freezes.
Rose said: “We’re doing everything we can. We’ve invested nearly £100m in the last month or so making sure customers get essentials at very, very attractive prices to try and help them.
“I would say the most important priority in the short term is to kill inflation, because once inflation gets embedded, it’s very, very hard to kill. If it means we have to slow the economy down for a while, and it looks as if we are heading for a recession, then so be it.”
• Get the latest grocery news and analysis straight to your inbox – sign up for our weekly newsletter
No comments yet