Supermarket executives have denied that a lack of industry competition has led to excess profits, claiming that they are currently “the most competitive we’ve ever been”.
Bosses from Tesco, Sainsbury’s, Asda, and Morrisons were questioned by the House of Commons Business and Trade Committee last Tuesday on why food prices have continued to rise despite a fall in the wholesale cost of ingredients such as wheat.
Supermarket bosses claim that the disparity is due to a lag of about three to nine months between wholesale costs going down and prices on store shelves falling. However, some on the committee disputed this. Conservative MP Jane Hunt asked executives if they were colluding to fix prices.
I heard recently about employees having to go to the food bank to pick up free donations of food they had stacked in their own supermarket because they cannot make ends meet
Darren Jones, Chair of the Business and Trade Committee
Chief Commercial Officer for Asda, Kris Comerford, responded by claiming UK retail was “the most competitive market”, a claim that was backed up by executives from Sainsbury’s and Tesco.
Darren Jones, Chair of the Committee, pointed out that three out of the four supermarkets had been enjoying increased profits since the Covid-19 pandemic. He also claimed that he had heard of Asda employees “having to go to the food bank to collect donations of food they had stacked in their own supermarket because they cannot make ends meet”.
In response, all four supermarkets denied taking advantage of the current economic situation to increase profit margins and claimed they were doing everything they could to shield consumers from higher costs.
None of the supermarket executives questioned were in support of a potential price cap on essential foods which had previously been considered by the government, though they have all separately called for more transparency on fuel prices to help ease economic pressures.
Executives also denied underpaying their workers, with all four stating that they paid all employees the National Living Wage or above.