'More competitive than ever': Supermarket bosses deny profiteering despite massive hikes in takings in grilling by MPs
27 June 2023, 11:01
Supermarket bosses have denied profiteering as part of a grilling by a Commons select committee investigating food inflation.
In a hearing led by chair Darren Jones MP, the chiefs of three of Britain's biggest supermarkets said they did not believe that they were not doing enough to ease food bills after record profits were reported from their companies.
Tesco's Gordon Gaya told the Business and Trade Committee that despite his company's profits of £2.03billion, up from £1.6billion in 2017/18, his company had made "7 per cent less profit than the last financial year" and that it was important for the public to understand that.
Gaya told MPs that Tesco is the "most competitive we have ever been" as MPs quizzed supermarket chiefs on what they are doing to help customers through the cost-of-living crisis today.
This sentiment was matched by Morrison's CEO David Potts, who said that his company was at the "closest they have ever been to Aldi and Lidl".
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ASDA's Kris Comerford said that the retailer's profits when adjusted were actually down 25 per cent - before stating the several initiatives the supermarket had launched to keep costs low.
That reflects what we've been trying to do to manage the inflation we are seeing. We all know the drivers of the inflation that the UK market has been seeing, the supply chain issues through the pandemic, the weak pound, the labour market costs, the war in Ukraine certainly affecting food and energy prices out there.
Rhian Bartlett, food commercial director at Sainsbury's, told the Business and Trade Committee: "We are acutely aware about the cost-of-living impact on our colleagues and how difficult they are all finding it right now.
"We've spent £560 million on keeping prices low, battling inflation and are doing absolutely everything we can to keep prices as low as possible for customers.
"In the most recent year we made lower profits, at £690 million - input costs are not being fully passed through to our shelf prices.
Supermarket chiefs were being grilled by MPs today over why food prices are still rising despite a fall in some wholesale costs.
Executives from Tesco, Sainsbury’s, Asda, and Morrisons will face the panel of MPs who are looking at the rise in the cost of a weekly shop.
Food inflation reached 14.6% in June, the British Retail Consortium said - down from 15.4%% in the year to May.
The British Retail Consortium is hopeful that food inflation should drop down to single digits later in the year.
Soaring food prices are having a detrimental impact on the mental health of shoppers and families, according to a study by consumer group Which?.
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The increased price of everyday groceries has worsened the mental health of a quarter (25%) of people, the survey suggests.
Some 23% say that rising food prices has hindered their ability to eat a healthy diet, while 22% said they had lost sleep over food costs, and one in five said their physical health had deteriorated.
Three in 10 women (30%) said their mental health had worsened as a result of soaring food prices.
A third of people aged 35 to 54 - those most likely to be parents of young families - said food costs had had a negative impact on their mental health.
They were more likely to be negatively affected than those aged 18 to 35 (27%) and over 55 (18%).
The findings come as MPs prepare to question senior figures from Sainsbury's, Morrisons, Tesco and Asda on food and fuel price inflation and whether consumers will soon see price falls.
Recent Which? research found that the cost of everyday family meals like pasta bake, fish fingers and chips and spaghetti bolognese had increased by up to 27% over the last 12 months, with some essential ingredients doubling during this time.
The Bank of England suggested last week that some retailers are jacking up prices or failing to pass on lower costs to consumers as a way of increasing their profit margins at a time of stubborn inflation.
Official figures last week showed that food inflation slowed from 19.1% in April to 18.4% in May after hitting a 45-year high in March.
One mother of two from Merseyside told Which? that her mental health had suffered because the price of baby formula had increased.
She told Which?: "My baby has reflux and yet we can't afford to buy the anti-reflux baby milk. It's gone up from £11.50 in 2021 to £14. If your body doesn't produce milk, it isn't a choice - you shouldn't have to pay a premium for something which is a necessity. Thinking about it brings me to tears.
"I didn't have babies until I was as financially stable. We should be doing well but instead we are looking at an uncertain future. We have worked very hard for what we have and I feel so angry that we and other families are not being looked after - our best interests are not being looked after. That all builds and builds and I feel like a pressure cooker waiting to explode."
Which? head of food policy Sue Davies said: "Which? research shows how the sustained stress and worry caused by rising food prices is now having a detrimental impact on people's mental and physical health.
"Women and young parents are among the worst affected and some people struggling to feed their children are asking themselves how much more of this they can take.
"Now is the time to act. The government must urgently get supermarkets to commit to stocking essential budget ranges in all their stores, particularly in areas where people are most in need, as well as make pricing much clearer so shoppers can compare prices and find the best value products."
Opinium surveyed 2,000 UK adults between May 19-23.
