The UK had record-high inflation between January 2021 and October 2022 (ONS, 2022). Data
published by the Office for national statistics show a steady increase month to month in the
Consumer Price inflation (CPI) index from 0.7% in January 2021 to 11.1% in October 2022,
the highest rate recorded in the last 10 years (ONS, 2022).
This study aimed at analyzing the effect of inflation over the period of 2021-22 on the
FTSE100 stock exchange value of retail food companies to evaluate the actions companies
have taken to improve their performance.
The research adopted a deductive strategy to collect quantitative and qualitative secondary
data. The secondary data extracted for this research included inflation data, stock exchange
data, and stock-related articles from several reputable sources.
In the exploration of this research, Tesco and Sainsbury’s were used as the sample retail food
companies and the data analysis revealed that although inflation affected the stock
exchange value of these two retail giants, the effect was to different degrees, as Tesco was
able to respond better than Sainsbury’s to the inflation. This, the researcher attributed to
the size of Tesco, its diversity both locally and internationally, and strategic initiatives.