Rising fuel price and taxes add up to 5% rise in income tax for poorer families

Tesco UK chief executive Richard Brasher describes cost of fuel, utilities and taxes as a 'real challenge' for his supermarket's customers

Tesco's UK chief executive, Richard Brasher, has claimed that the "inexorable rise of fuel prices", as well as other rising household costs, add up to a 5% rise in income tax for poorer families.

Filling up at the pumps, as well as higher utilities bills and taxes, is estimated to be costing households £12 more a week than last year and Brasher said the squeeze on disposable incomes was a "real challenge" for Tesco's customers. He said shoppers were now "paranoid about debt", with financial tips websites like Martin Lewis's Moneysavingexpert.com attracting a "biblical" following.

Brasher is Tesco's first dedicated UK chief executive and his comments were made at one of his first public appearances at the Retail Week conference in London.
Also speaking at the conference was Alliance Boots chief executive Andy Hornby, who predicted: "We are not going to see consumer spend growing in the next two years." Hornby joined the Boots the Chemist owner in 2009 just nine months after he left HBOS, the bank rescued by Lloyds in a government-brokered takeover.
Higher taxes as well as rising food and fuel prices are forcing consumers to change their shopping habits, but Brasher said consumers were not reacting in a uniform manner, with Tesco seeing both "trading up and trading down" in its stores. He said there was "no single soundbite" that described how consumers were reacting to straitened times.
The cautious comments were in keeping with a survey last week showing that UK retail sales in February fell at their fastest annual pace in 10 months. The chief executive of Debenhams, Rob Templeman, said consumers had pulled in their horns since the turn of the year: "The consumer mindset has changed. They're looking at what they need to have, not what they want to have."