Responding to the CMA report released today,
Helen Dickinson, Chief Executive of the BRC, said:
“We welcome the CMA report which confirms that despite the
challenges caused by rising costs throughout the supply chain,
the grocery market remains as competitive and efficient as ever.
Indeed, retailers have gone above and beyond to try and protect
consumers from rising costs in the supply chain, with operating
profits falling “significantly to below historic levels”.
“Supermarkets have been working hard to support their customers
through the cost of living crisis and will be reflecting on the
CMA’s recommendations on unit pricing. The CMA itself notes that
“many of these problems stem from the rules themselves”, and
retailers stand ready to support proposed changes to the unit
pricing rules.
“As noted in the report, supermarket margins have remained
extremely tight as they try to support their customers and absorb
the worst of the rising costs in the supply chain. In the last
few months, some of these pressures have begun to ease, such as
with global commodity prices and the weakness of the pound, and
we are now seeing competition driving down the price of key
staples. This fierce competition between British supermarkets has
also been a key reason why the UK continues to deliver among the
cheapest groceries in Europe.”
-ENDS-
Notes:
The report notes on reasons for price rises:
“On competition in groceries, the evidence we have seen
indicates that recent high price inflation for groceries does not
appear to date to have been driven at an aggregate level by weak
or ineffective competition between retailers.”
On profits/profiteering:
“Having remained steady in 2020/21 and 2021/22, operating
profits of the 11 national retailers fell significantly – in
aggregate by 41.5% and as a percentage of revenues from 3.2% to
1.8% – to below historic levels, in the most recent financial
year (2022/23). This indicates that they have not ‘passed
through’ to consumers all of the cost increases that they have
incurred.”
On unit pricing:
“Many of these problems [on unit pricing] stem from the rules
themselves, which permit unhelpful
inconsistencies in retailers’ practices, and leave too much
scope for interpretation.”
