Speaking at the World Retail Congress in London this week, he pointed to mounting pressures from rising labour costs, as well as increased regulation in areas such as packaging.
The Labour Government has heaped billions of extra costs on retailers via increased National Insurance Contributions, an above-inflation hike in the minimum wage, and higher business rates i.e. warnings of shop closures, job losses.
Murphy: “Things have rarely been as tough for retail as they are today”, highlighting global supply chain disruptions ( via military conflict, trade wars, climate crisis).
Murphy warned: “There is geopolitical instability from the Ukraine to the Red Sea, which will continue to disrupt our supply chains and markets.”
Trump tariffs uncertainties risk upending existing supply chains.
He also highlighted that farmers in its UK supply chain are “under unprecedented strain”.
Meanwhile, days after the UK and US announced a limited trade deal, Murphy revealed that Tesco has no plans to source American beef.
The deal gave US farmers a quota of 13,000 metric tonnes for beef, which meets UK standards, with UK farmers having the same quota for sales into the US.
Speaking to Reuters on the sidelines of the World Retail Congress, Murphy said: “We source 100% Irish and British beef in Tesco and for the foreseeable future that policy will be the same, we’re not planning to change it.”
Last week, US Secretary of Agriculture Brooke Rollins hailed American beef as “the safest, the best quality and the crown jewel of American agriculture” and predicted the trade deal would “exponentially increase” US beef exports to Britain.
However, with little difference between the prices of British-produced beef and US beef that does meet UK standards, industry commentators have suggested that the US product could struggle to find retail buyers in the UK.
NamNews Implications:
- ‘Retail Conditions Have Rarely Been As Tough’ – agreed 100%+!
- “But when the going gets tough, the tough get going”, as we used to say (!)
- Real opportunities for those who act while rivals await evidence of a return to normal.
- Tesco have made clear their strategy in optimising real market conditions…
- …and in fact keeping up with Tesco will be a challenge for suppliers.
- Meanwhile, Tesco's US beef position is significant: (in our opinion)
- ‘with little difference between the prices of British-produced beef and US beef that does meet UK standards’…
- …it is unlikely that US Beef will find a UK market.
- In which case, much depends on the UK government’s determination to resist any attempts to compromise quality standards, under US pressure.
- Watch this space…
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