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The UK’s leading supermarkets on Tuesday backed the case for more transparency on fuel prices for consumers, as they denied profiteering from high food inflation.
Executives from Tesco, J Sainsbury, Asda and Wm Morrison told MPs they would support an online scheme that would require petrol stations to share live fuel prices with customers in England.
This would be similar to existing arrangements in Northern Ireland and would help consumers to secure the best deal at the pumps after a surge in petrol and diesel prices since Russia’s full-scale invasion of Ukraine.
The Competition and Markets Authority said last month that supermarkets had become less price competitive at the pumps following an investigation into the retail fuel market. The big four supermarkets own about half of the UK’s garage forecourts.
“We would welcome more transparency on price and fuel,” Gordon Gafa, commercial director of Tesco, told the House of Commons business select committee.
“In fact, we would welcome the system that is in Northern Ireland where you can go online and compare.”
Asked if they agreed with the competition regulator’s findings that retailers’ profit margins on fuel had increased over the past four years, executives at Tesco and Morrisons said they believed that was the case, while those from Asda and Sainsbury’s did not give a clear answer.
David Potts, chief executive of Morrisons, said: “I think there is a bit more profit on fuel.”
The MPs’ scrutiny of the supermarkets has been spurred by the cost of living crisis and the biggest squeeze in living standards since the 1950s.
Inflation remained stuck at 8.7 per cent in May, according to official data, while mortgage borrowing costs have also risen, further weighing on household finances.
The supermarket executives denied profiteering from high food prices and pushed back against claims of being a “cartel”.
“The UK retail market is the most competitive market in the world,” said Kris Comerford, Asda’s chief commercial officer.
His views were echoed by Rhian Bartlett, Sainsbury’s food commercial director, who said the UK was “fiercely competitive as a market”.
Gafa said Tesco made about four pence profit for every pound spent by the consumer, adding it was “the most competitive we’ve ever been”.
Bartlett said Sainsbury’s made “less than three pence”, and pointed to wafer-thin profit margins.
MPs wanted to know why Tesco, Sainsbury’s and Asda posted bigger profits now than they did before the Covid-19 pandemic. They all highlighted lower profits year on year.
The supermarket executives said a combination of higher wages and energy bills, as well as elevated commodity costs such as wheat, had pushed up food prices, but there are signs that inflation is starting to ease.
Food inflation stood at 14.6 per cent in June, down from 15.4 per cent in May, according to the British Retail Consortium, the trade body.
The prices of milk, butter and bread have fallen but they are still relatively expensive compared with a few years ago.
