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Big British companies are trashing their reputation on inflation – will Sunak sort them?

What should be an interesting encounter is set to take place tomorrow between British prime minister Rishi Sunak and the bosses of the big supermarket chains – the shops whose food prices keep rising exponentially even while raw material costs – food – drop sharply.

Food inflation is running at nearly 20% in the shops with, according to the Lib Dems, wholemeal bread up 20% while wheat has fallen 14%, apples are the same even though wholesale costs are down 45% and there’s much more. For context, Tesco is still making over £1bn profit, enough to pay CEO Ken Murphy £4.4m and his CFO nearly £2m.

German discounters Aldi and Lidl are, according to some analyses, the worst offenders with prices up roughly 25%. Interesting that these both have around 1,000 shops in the UK now. Does this mean they can finally hike prices as they approach a stranglehold in some areas?

It’s part of a wider picture of companies feathering their own nests at the expense of customers, despite their constant pronouncements that customers come first, they’re doing their bit for the environment and so on. There’s a whole vast industry comprising PR people (or reputation managers as some like to style themselves), lobbyists, so-called customer experience experts in agencies and many more purporting to make business better.

Banks are as bad, as are energy companies. Bank of England governor Andrew Bailey is worried about food prices and the cost of mortgages. But that hasn’t stopped him hiking interest rates yet again even though the effect of the BoE’s ten or so recent rises has yet to fully feed through.

In short, and someone will doubtless produce a survey soon showing this, trust between big companies and consumers is surely at an all-time low.

There’s an obvious impact on marketing communications too. Agencies and others clearly try to present their clients in the best light but, when price-gouging seems the norm at a time when many people are in difficulties, any such communications will seem phoney, if not downright dishonest. That reflects on the companies that produce them – will they say anything for money?

Purpose-conscious Unilever has been whacking up its prices just as enthusiastically as the supermarkets. So-called trusted brands will only be trusted for so long if they play fair. And not many seem to be.

Of course inflation is a problem for everyone. But many of the UK’s biggest companies seem to be cheerfully adding to it so the bosses can collect their ridiculous bonuses.

Will Sunak sort them out tomorrow? Somehow one doubts it but at the very least they should be given an embarrassingly hard time. Shame it isn’t a public hearing.

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