By Joely Santa Cruz and Ben van der Merwe, data journalists
The Liberal Democrats and the trade union Unite have called on the Competition and Markets Authority to launch an investigation into whether supermarket price rises are a form of profiteering.
This chart certainly raises the question…
But, Kris Hamer, director of insight at the British Retail Consortium, told Sky News: “If you look at the financial results of any of the big food retailers, the margins that they’re making are pretty slim. Some of our members are announcing underlying losses, from running their operations.
“So just looking at the numbers, you can see that there’s not profiteering going on. I think the question that perhaps politicians ought to be asking is where is the money?
“If you look through the supply chain, who’s making money from the point of purchase from the farmer’s field through to the [retailers]? The margins are not made in the last mile.”
The two biggest supermarket chains, Tesco and Sainsbury’s, both reported a decrease in pre-tax profits in the year to March.
Tesco’s profits were down by more than half compared to the previous year, while Sainsbury’s were down by 5.5%.
By contrast, one of the major suppliers of goods to supermarkets, Unilever, saw its pre-tax profits rise 21% in 2022.
The Competition and Markets Authority said recently that they have “not seen evidence pointing to specific competition concerns in the grocery sector” but are stepping up work in the sector “to be sure that weak competition is not adding to the problems”. This includes looking at suppliers and raw material suppliers as well as supermarkets.