Last week the Office for National Statistics revealed the most recent inflation figures exhibiting that meals value rises have eased barely however stay at a stubbornly excessive 18.4%.
It comes as supermarkets are beneath rising stress at hand down financial savings they’re seeing on wholesale objects to customers, who’ve confronted punishing meals value inflation in current months.
Addressing Mr Gafa, committee chairman Darren Jones mentioned: “According to your 2018/19 annual accounts you made a profit of 1.6 billion and in 2021/2022 accounts you made a profit of 2.03 billion. So you’ve increased your profit quite significantly there, haven’t you?”
Mr Gafa replied: “As I say, profits year-on-year for the group are down, we have sold more year on year and we have made less.
But Mr Jones pressed: “How can it be possible that you are making hundreds of millions of pounds in additional profit?”
Mr Gafa replied: “I’m referring to our latest accounts for 2022/23 so that may be the discrepancy.”
We’ve spent £560 million on preserving costs low, battling inflation and are doing completely every thing we are able to to maintain costs as little as doable for purchasers
Sainsbury’s advised the committee it was not passing all the prices of inflation in its provide chain to clients, because it too was quizzed over whether or not supermarkets are profiteering amid rampant meals inflation.
Rhian Bartlett, meals industrial director at Sainsbury’s, advised 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.
“We’ve submitted lots of detail on that to the CMA (Competition and Markets Authority) and have had good discussions with the CMA.
“We are inflating behind our input costs and inflating wherever possible behind the market.”
The committee additionally heard from the grocery store representatives that they weren’t in favour of a cap on the worth of fundamental meals objects, not too long ago thought-about by the Government.
We’re typically thought-about one of the vital aggressive meals markets on this planet. I’m unsure what value caps would add to that course of, apart from paperwork
Asked about hypothesis a couple of cap, Ms Bartlett mentioned: “This is fiercely competitive as a market.
“We’re generally considered one of the most competitive food markets in the world. I’m not sure what price caps would add to that process, other than bureaucracy.
“Where we’ve seen them applied in France and so on it can have unintended consequences – of selling out and other prices moving up and down.
“So I think this market self-regulates to a positive extent, so we wouldn’t be in support of price caps.”
Data from the BRC-NielsenIQ Shop Price Index instructed retailers are starting to cross on decrease wholesale prices, with meals inflation easing for a second month operating as supermarkets reduce the worth of family staples.
Food inflation decelerated to 14.6% in June, a comparatively vital drop from May’s 15.4% and under the three-month common of 15.2%.
Fresh meals inflation noticed a major slowing from May’s 17.2% to fifteen.7% as retailers dropped the costs of staples together with milk, cheese and eggs.
