Tesco boss warns Red Sea conflict could ‘drive inflation’ due to shipping disruption

Last Updated, Jan 11, 2024, 10:52 AM

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Tesco boss Ken Murphy has issued a warning that the ongoing disruption on the Red Sea could hike inflation and leave supermarket shelves empty.

Shipping has been impacted by attacks on vessels by Houthi rebels from Yemen which has forced traders to travel around the southern tip of Africa instead of using the important trading route between the Arabian sea and the Mediterranean.

Mr Murphy said: “If they do have to go the whole way around Africa to get to Europe, it extends shipping times, it constrains shipping space and it drives up shipping costs.

“So that could drive inflation on some items, but we just don’t know.”

Houthi fighter stands on the Galaxy Leader cargo ship in the Red Sea

Houthi fighters are targeting ships in the Red SeaREUTERS

The Consumer Price Index (CPI) rate of inflation for the 12 month to November 2023 eased to 3.9 per cent which signalled that the prices of everyday goods and services could drop in the months ahead.

Recently, Tesco announced plans to reduce the price of more than 150 supermarket items by 12.5 per cent.

The supermarket also confirmed that shoppers will be able to get double Clubcard points for the first time in over a decade until February 25.

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Supermarket prices could be pushed by the conflict

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