Tuesday, December 4, 2007
Tesco Petrol is up at 102.9
Tesco calls for rate cut
Tesco Plc said on Tuesday that shoppers were being more cautious and the Bank of England should cut interest rates "sooner rather than later," as it saw little sign of inflation. "Our firm view is that we should be seeing a move down in interest rates sooner rather than later," Finance Director Andrew Higginson told Reuters.
Posted by alan @ 06:45 AM (1826 views)
28 thoughts on “Tesco Petrol is up at 102.9”
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seanb303 says:
they increased their prices by 14% in the last year
no inflation i don’t think so
Dave The Box says:
“as it saw little sign of inflation”
Are they blind, or what!
@seanb303
My sentiments exactly. What a bunch of t*ss*rs!
paul says:
It must be the silly season.
Or is it something to do with Tesco’s estate agency business?
jack c says:
Finance Director Mr Higginson should take £100 in cash into any Tesco store of his choice in the UK week on week and buy the same basket of essential food shopping – I guarantee he will see the number of items gradually shrink as he gets less and less for his £100 simply because the inflation rate he is quoting bears no resemblance to the true rate. I fully appreciate Tesco and the Government are using a wider basket of goods as a measure of inflation but you do not (for example) buy a 32” LCD HD ready TV every week!!
Lierbag says:
Tesco have every right to be anxious. This may well be the last traditionally ‘over-indulgent’ Christmas most people will ever enjoy.
Come 2008, the increased costs of transport and food production (which farmers, hauliers and retailers have been holding back up to now) will begin being factored into product pricing. Consumers are in for a big, big shock.
As well as the well publicised ‘credit crunch’ making people more cautious about spending the money they don’t actually have, the cost of living can only rise exponentially as fuel prices (in a sphere where the supply/demand axis already has zero elasticity) change with every global geopolitical twist and turn. Added to the oil supply woes, the vast tracts of arable land taken out of production for biofuels development (cars instead of food!) means that staple foodstuffs such as cereals/rice will be increasingly scarce and costly. There is already talk of a pint of beer costing £4 pint in 2008 (though it’s probably that much already in London) which is absurd, when you consider that the same amount of petrol would cost you 50p).
Mutterings in the industry papers (such as this one from the UK ‘Farmer’s Guardian’) give some idea that all is not going to be well.
‘ A LOGISTICAL supply problem with fertilisers in spring 2008 is now a reality not a possibility, say fertiliser companies.
World demand is outstripping supply and farmers are being advised not only to make sure they have ordered what they need, but to take delivery and make sure they have it.
“This coming season, the most likely situation is a shortage,” said Yara’s England and Wales business manager Steven Chisholm.
World demand for grain production for both feed and biofuel was currently outstripping supply and that was driving the demand for fertilisers.
“All I would say is order it and get it delivered – ownership will be nine tenths of the law this spring.”
Tinecu says:
I heard from a senior retail exec that Tesco have borrowed heavily to fund their expansion over the last 5 years. Hence higher IRs must be hurting.
Rainbow says:
Report a fantastic set of result’s (despite rate rise’s), and then have the nerve to call for rate cut’s!!
But they are concerned about the prospects for the rest of the High st, you mean your competitors? of course you are.
sovietuk says:
One way of economising is to go for the Value packs. It’s surprising how many different types of product now come with the boring plain white and blue wrapping. Shopping last night they even had mint chocolates in white and blue and at about a third of the price of the more well know brand. The biggest problem is being able to afford the petrol to get to the local store in the first place.
Mark says:
read tescos statement. sales are up, prices are up 1% so what are they moaning about??
Tesco (LSE: TSCO.L – news) says it has plenty to be cheerful about in the run-up to Christmas thanks to healthy sales over the Autumn period.
Excluding petrol, they were up 4.1% in the 13 weeks to November (Frankfurt: A0S9N7 – news) 24 – in line with City forecasts.
The UK’s biggest grocery chain said food inflation rose by almost 1% over the period.
tick tock says:
Having just completed a weekly shop in Tesco, this ‘no sign of inflation’ comment is absolutely outrageous.
Their in house prices are rising sharply by the week, and I suspect 14% understates this rise significantly.
What Tesco’s is really saying of course is that shoppers are running out of cash and are, therefore, cutting back on the quantity of things that they are buying. They would like it very much if the BOE were to make it easier for their punters to borrow yet more money in order to maintain profit margins in the face of this slowdown.
Shameless, selfish, and extremely short-sighted.
yoyo1 says:
I can explain how both Tesco’s and the BOE calculate their inflation figures. It’s on special offers only. You know, buy one get one free, 3 for the price of 2 etc. In fact they’ve all gone shopping today, so they can have a show and tell tomorrow and see who got the best deal. It’s simple really when you know how.
maddison says:
OK it is ridiculous everyone talking about no sign of inflation but having nothing to back it up. We should compile our own statistics and what better time than now. Please keep all your receipts in the run up to Christmas and put in a little box. Next Christmas we will compare. Someone can set up a little collaborative google docs spreadsheet. Basic rules – we must compare like for like and we have to include other non high street items like. Utilities, drycleaning, nursery fees, insurance etc
talking rot says:
This does not marry up with reports about rising food prices. I would guess there is due to the lag in food “raw material” prices and food prices in the supermarkets. I wonder if food inflation will be invisible in 9 months time?
Either way, this is total rot.
I think ‘tick tock’ has hit the nail on the head: A very insightful comment.
growler says:
I think this sort of headline is an insult to people. Why not just say “please make borrowing easier so more money can be spent in my store”.
cyril says:
You can probably buy “value” products for next to nothing but I wouldn’t eat most of that sh#t if you paid me. Try buying anything decent like free range chicken and see the difference.
Although I did used to buy value tinned tomatoes when they were 5p a can.
sosoon says:
The true issue with Tesco is that their profit for overpriced essentials won’t make up for the huge array of discretionary items that people aren’t buying.
Good to see the juggernaut is panic talking!!
Stevie Dee says:
@Sovietuk.. when everyone is broke, maybe they might intoduce a few more colours to cheers us all up!!! Yellow is good! Imagine, people fighting over own-branded mint chocolate biscuits, messy, but it does happen at Christmas, I know, as I work part time in a supermarket, but I believe “shopping rage” will be the new “car rage” of 2008.
But getting back to the supermarkets, if the government bends to the supermarkets, it will merely be confirmation to the intellectual masses that this ineffect is a quazi communist state or put in another way “communism with flashing lights”. The supermarkets working with the government against the populus, and then holding the public to ransome, not extortion as they are not demanding money directly, but hey, that’s what you get for a society of quango’s & incompetent individuals who are simply self-interested, dim and party to these major inefficiencies we now see.
jack c says:
Food inflation is reported by the Daily Express with fruit and veg up 23%.
dohousescrashinthewoods says:
No wonder obesity is on the rise. With fruit and veg at these prices, people can only afford to eat 32″ plasmas.
Jonathan says:
Always ask yourself, ‘Does this commentator have a vested interest?’
Amazingly, they usually do!
Young_mark says:
A great idea from Maddison about compiling our own inflation figures. I’ll start.
I’ve just bought a new car. It’s a family-sized car with 2.0 diesel engine, full leather interior, air-conditioning, dual-zone climate control, ABS, ESP, XYZ, ETC, cruise-control, 6CD autochanger, 12 speakers, 12 airbags, 17″ alloys, metallic paint, xenon headlights, parking sensors, 10 year anto-corrosion warranty, alarm, immobiliser. I could go on, but my fingers are getting tired. Cost brand new: £15,599. My first car, almost twenty years ago had none of the above. It had rust (well once it got to 3 years old). It cost £14,300. I reckon to get it to the specification of my new car, I would have had to spend at least £30k, of 1990 money. That’s somewhere in the region of £50 in today’s money. So deflation over the intervening period has saved me over £34k. If this carries on, they’ll be giving the cars away free with the petrol.
Mind you, you should see the price of Weetabix. It’s wicked!
Jonb says:
Yes you can save money by buying value range stuff. But when, for example, Tesco Value bread goes up from 29p to 59p in the space of a year, there is still clearly a problem with inflation.
little professor says:
Cyril – in most cases the value products are very similar, if not identical to the branded products – they are made by the same manufacturers.
Matt_the_hat says:
Just a thought…
If Tesco have a VI (like other supermarkets) in dropping the IRs and a large percentage of the basket for CPI calculation is under their immediate control. Then I’m no stats person but can’t the inflation figure be fudged – i.e. NOS asks tesco what to include in basket and tesco states its entire range of inedible value products that very few people use…..Not really typical shoopping is it
Just a thought….
denzil says:
Tesco’s statement is idiotic. Large numbers of suppliers are feeding escalating costs through to the buyers at the big supermarkets. Increases of 10-20% are common at present.
Regardless of that, who the hell do Tesco’s think they are, bleating about IR cuts! Lenders seem to be under the illusion they dictate IR’s and now Tesco’s shoving their beaks in too.
Northern Bear says:
Isn’t it incredible that Tesco are suggesting that people actually need to borrow money to buy food!!!!! And the depression hasn’t even started yet – where will we be in 2 years time??
Northern Bear says:
It beggars belief that VI’s are prepared to lie so blatently to protect their empires. Yesterday Paragon, today Tesco. I guess they take their example from politicians. It seems most people are blissfully unaware they are constantly being lied to by those in authority, but for how much longer?
James says:
Bravo, Young_mark. The vast majority of people on these boards scream VESTED INTEREST at anything that doesn’t agree with their semi-informed views, when they themselves have the most blinkered view of events.