TESCO was roundly condemned today for adding to the-cost-of-living crisis by warning of a hike in food prices — despite making bumper profits.

John Allan, chairman of Britain’s biggest supermarket, said the “worst is still to come” after raising the company’s food prices by 1 per cent in the last quarter, with increases five times that possible by spring. 

He blamed skyrocketing energy bills and soaring inflation for the current situation. 

However, when asked on the BBC’s Sunday Morning if the firm might have to make less profit to help its customers, Mr Allan claimed: “Well, we don’t make an awful lot of profit in relation to our sales.”

This is despite Tesco reporting last month it now expects its 2021-22 profits to top £2.6 billion after very strong Christmas sales. 

He highlighted the company’s work to help community projects and moving surplus food to local initiatives, adding: “[We are] trying very, very hard to do our bit and still make a modest profit, which frankly we need to be able to invest in the business.”

Stagnating wages, surging energy prices and moves from Tory ministers to cut universal credit and increase taxes are already putting massive pressure on households as inflation soars to a 30-year high.

Bank of England governor Andrew Bailey warns that the consumer price index rate could hit 7.25 per cent by April and may remain higher than usual until 2024.

Small business owners have reacted with alarm, with Danielle McKenny, owner of organic skincare company Gaea’s Garden, saying: “I don't see any politicians losing sleep over any of this insanity.

“The past two years have been absolutely devastating for small businesses. While our sales have plummeted, the cost of living and eating has skyrocketed.”

Storm In A Teacup Gifts owner Jenny Blyth added: “For the first time in many years I’m scared.

“I don’t have enough money to heat my home and run my business simultaneously. How do I invest in my future if I can barely fund my present?”

Bakers’ union national president Ian Hodson stressed people are already “trying to cut back on things they are not really in control of — be it transport, rent, mortgages [or] energy.”

He told the Morning Star: “Capitalism is in crisis — we can’t make it fairer, it’s got to be replaced.

“We can’t compromise with a system that creates these inequalities.”

Mr Hodson blasted the failure of both Labour and the Conservatives to back West Derby MP Ian Byrne’s national right-to-food campaign, which will result in “more and more people needing to use foodbanks [and] facing health issues” at a time of severe pressure for the NHS. 

TUC general secretary Frances O’Grady told the Star: “The current crisis comes on the back of the last decade’s pay squeeze and social security cuts, which have made it much harder for families to cope with price hikes.

“The government must do far more to help working families. We need much bolder action on reducing energy bills, including a windfall tax on North Sea gas and oil, and an urgent boost to universal credit.

“We also need an urgent plan to get wages rising across the economy. The government should lead the way with decent pay rises across the public sector.

“The minimum wage should go up to at least £10 per hour immediately. And working people must get stronger pay bargaining rights, so that unions can win them the pay they deserve.”

Retail union head Paddy Lillis, who backed the call for a higher minimum wage, called for an “end to insecure employment and action to ensure that retail jobs are no longer undervalued.”