Tesco founder blasted PM over ‘ridiculous’ restriction preventing lower prices

Tesco founder blasted PM over ‘ridiculous’ restriction preventing lower prices

Today, Tesco is the largest food retailer in the UK, dominating the market with a 27 percent share, alongside the other Big Four supermarkets of Sainsbury’s, Asda and Morrisons. But things have changed dramatically over the last century since Sir Jack first set up his market store in Hackney selling surplus Army supplies. His business expanded rapidly, with more than 100 shops across the country by 1939 and in 1961 its new Leicester store became the largest supermarket in Europe.

However, there was one thing in Sir Jack’s way – the Resale Price Maintenance Bill – which meant the manufacturer and its distributors agreed that suppliers set the sale price.

The BBC’s ‘Pile It High, Sell It Cheap’ documentary revealed how “Jack wasn’t going to sit on his armchair” and so he “decided to go straight to the top and have a word with Ted Heath”.

And incredible archived footage of Sir Jack shows how things panned out during their conversation.

He stated: “I said to him [Sir Edward], ‘this is ridiculous’.

“People that stock our supplies say ‘you can’t get this and you can’t get that’ and you have to go round the backdoor to get goods to a company like ours.

“He said he thought it would be a damn good idea if he put a bullet in it himself, and he did.

“After a long, hard struggle, it was accepted.

“I feel very happy that I was one of the originators or the originator of this.”

In 1964, the Resale Prices Act was passed, which now considers all resale price agreements to be against public interest unless proven otherwise.

READ MORE: Tesco plots new online shopping focus as customer habits change and 15,000 stores close

“By the Seventies, rising incomes began to work in Sainsbury’s favour, rising incomes meant customers could afford to spend extra and no longer needed stamps to acquire items beyond their needs.”

Tesco continues to be a favourite among Britons to this day.

Last month the retailer reported full-year sales of £53.4billion, a seven percent increase on the previous year.

However, increased costs associated with the pandemic, including three staff bonuses and substantial losses at Tesco Bank, meant operating profits fell 28.3 percent to £1.8billion.

Tesco incurred additional costs of about £900million to operate stores and warehouses safely during the outbreak.

But the supermarket giant expects only a quarter of those costs to repeat this year and its banking division should also return to profit.

The group expects retail operating profit to recover to the highs of 2019 this year.

Published at Tue, 04 May 2021 07:10:00 +0000