Supermarket chiefs berated by MPs over execs' pay including £2,298 per hour for Sainsbury’s boss
27 June 2023, 12:17 | Updated: 27 June 2023, 12:30
Supermarket chiefs were left silent when grilled on the large salaries paid to execs during the cost-of-living crisis as food prices continue to rise.
In a hearing led by chair Darren Jones MP, the chiefs of four of Britain's biggest supermarkets remained silent when questioned over the large salaries and shareholder dividends paid to executives after previously claiming that their priority was keeping prices low.
Sainsbury's food commercial director Rhian Bartlett refused to comment on the £3.96m in bonuses on top of an £899,000 a year salary granted to CEO Simon Roberts while under questioning from Labour's Andy McDonald MP.
Ms Bartlett told the committee: As a listed company, you know all of our board directors salaries are published and set by the [Remuneration Committee]. I don't sit on the RemCo. I don't have any remit over setting any of those salaries so I cant really comment any further on that today."
Mr McDonald also took aim at Tesco's £859 million in dividends due to be paid to stockholders in the coming months - alongside Sainsbury's £319 million in payouts.
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Tesco's Gordon Gaya defended the dividends as part and parcel to the growth of the business - but when Mr McDonald followed up by asking the four chiefs appearing before the committee to justify the large salaries and dividends paid after each of them had reiterated their commitment to keeping prices "fair".
"Do you not get the point that this discussion is couched around a cost of living crisis and yet I have got to say that chief executives across the board are in the same ballpark in terms of their pay?
"Do you not understand how that sits with the general public that these wages are being paid and you tell us your purpose is to provide the most reasonably priced food for your customers and yet dividends are paid out, and these salaries at this level? Does that not chime with any of you?
Mr McDonald's question was not answered by any of the four chiefs present.
A bemused McDonald then said: "No? That's just absolutely, utterly staggering quite frankly."
Supermarket execs fail to answer question about massive salaries amid cost of living crisis
Earlier in the hearing, 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.
Sainsbury's Rhian Bartlett told the 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.
