Iceland boss suggests supermarkets should be willing to make zero profits during cost of living crisis

A supermarket boss has said businesses like his should commit to making fewer, or even zero, profits during the cost-of-living crisis as food prices continue to rise.

It comes as data from the British Retail Consortium and data firm Nielsen revealed annual food inflation in the UK hit 11.6% in the year to September 2022 – the highest level on record.

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Richard Walker, managing director of Iceland, has urged supermarkets to show "responsible capitalism" and reduce prices – even if it means a hit to company profits.

"I think [there should be] responsible capitalism, I think businesses [should be] accepting lower or no profits," Walker told BBC Radio 4's Today programme.

Iceland is already set to introduce 1p ready meals to help its customers struggling with rising costs.

"800,000 kids living in poverty don't qualify for free school meals," Walker added.

"The easiest way to reach them is through the universal credit scheme, but also through businesses".

Walker, who is also running to be a Conservative MP, also warned that things will continue to get "worse" with food prices.

“I’ve got cost prices currently on the table from big branded suppliers that we haven’t stomached yet as a business let alone have to pass on to our customers," he said.

“So I think it will get worse and coming into winter, we’ve got heating, we’ve got fuel, we’ve got food inflation.

"Food insecurity is inevitably on the rise and it’s the households with kids who are most at risk.”

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According to the ONS, low fat milk has seen one of the biggest price surges in the past year with cost up 42.1% - with whole milk seeing a 30.2% increase. Pasta has gone up in price by 22.7%, and potatoes have gone up 19.9%.

It comes as Rishi Sunak refuses to confirm whether benefits and state pensions will increase in line with inflation – despite campaigners and charities warning that failing to do so could result in an explosion of destitution.

Sunak has said it “would not be right to comment on individual policy measures” before the autumn statement on 17 November.

“I think everyone knows we do face a challenging economic outlook and difficult decisions will need to be made," he said during prime minister's questions on Wednesday.

“What I would say is that we will always, as my track record as chancellor demonstrates, have fairness and compassion at the heart of everything we do.”

Watch: Rishi Sunak warns 'difficult decisions' to be made to fix economy amid cost of living crisis