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Opinion
Andrea Felsted

Advantage Tesco in the UK Grocery Wars

The big four British supermarkets probably learned their lesson in the previous battle with Aldi and Lidl. What might happen this time?

Tesco Plc And Marks & Spencer Group Plc Stores Ahead Of Sales Figures
Photographer: Bloomberg/Bloomberg

UK food prices are rising at the fastest pace in more than a decade. Britain’s big four supermarkets are trying to pass on their own inflation by charging more. However, they must be careful not to sleepwalk into a crisis — as they did in the wake of the great recession, when they drove customers into the arms of the no-frills supermarkets Aldi and Lidl. That was a catastrophe for the mainstream grocery sector — and a boon for the German upstarts.

Monthly grocery price inflation reached 5.9% in the four weeks to April 17, the highest level since December 2011, according to data provider Kantar. As my Bloomberg News colleagues have reported, the combination of rising commodity prices, escalating labor costs and Brexit is raising fears that the era of cheap food is over.