Tesco boss warns of austerity hitting consumer confidence
Tesco boss Tony Keohane has urged the Government to do everything it can to boost consumer confidence in the upcoming Budget.
"People have adjusted to austerity and got used to it, but clearly it has had an impact on customer spending," Keohane told the Sunday Independent. "All of the retailers have had to fight harder. I hope the Government and the people who make the final call [on the Budget] make every effort to preserve consumer confidence."
Consumer confidence has dived in recent months as fears about the upcoming Budget – the sixth austerity budget to hit the country – increase. The Budget is expected to include a property tax, a sugar tax, motor tax hikes and cuts in child benefit.
As well as grappling with lower disposable income, Irish consumers are struggling with higher food prices. The price of potatoes has increased by almost a fifth over the last year, while the price of beef, pork and flour is at least six times more than the rate of inflation. A spike in the price of commodities, such as grain and oilseed, has helped to push up food prices.
Asked if consumers were facing years of higher food prices, Keohane said: "If commodity prices stay high, there will be some impact on prices."
Keohane – who addressed a lunch of Irish exporters last Friday – believes that the baby boom will be good for retailers. "The population is growing, so that will be a growth area," said Keohane.
Sunday Indo Business