"Groceries are not getting cheaper! There will be fluctuations, as we're seeing now with milk. But the time of sustained price drops is past," Chairman Klaus Gehrig told Bild.
Gehrig predicted short- and long-term price increases. The worldwide population explosion is driving prices up by increasing demand for food and reducing space for food production, he told the newspaper.
The next step will be for brands that have held their prices steady to this point to follow the trend, he said.
The rising prices are also becoming a source of worry for the government. The German Finance Ministry said a statement on Monday that high food and energy prices are combining with expectations of an economic slowdown to put a damper on consumer spending.
But Lidl isn't only concerned about the increasing cost of food. Gehrig said board members at Lidl should have apologized personally sooner for the widespread practice of using miniature cameras to spy on employees, which has shocked Germany since newsmagazine Stern broke the story in late March. He said board members were unaware of the practice.
The store's surveillance logs, according to Stern, recorded details of employees' private lives from divorce to alcohol problems, illnesses and unemployed relatives. Lidl's chief executive in Germany, Frank Michael Mros, told Bild in Monday's interview the logs would be deleted upon approval from government data security authorities.
The grocer will thank full-time employees for their loyalty during the spying scandal with a one-time payment of €300 at the end of April, Gehrig said. Part-time employees will get a prorated amount.
German worker's union Verdi has called for employees spied on by Lidl to sue the company for damages.