Fury as Britain's top supermarkets post 97 PER CENT surge in profits

Supermarkets have been slammed for posting a 97 per cent surge in profits while millions struggled to put food on the table.

Bosses at Tesco, Sainsbury’s, Asda, Lidl and Waitrose today came under fire from MPs investigating spiralling bills.

Evidence from the consumer champion Which? shows millions are worried about prices or have been forced to skip meals.

And a record rise in shoplifting has been partly driven by the fact essentials, such as baby formula, were too expensive.

At the same time farmers have been squeezed by supermarkets who have failed to pay them a fair price that reflects surging costs.

Last year alone, Tesco made £2.3 billion. Commercial Director for Fresh Food at Tesco, Dom Morrey, claimed accounting measures had inflated the chain’s profits

Sainsbury’s posted a £701m profit last year. Sainsbury’s executive Rhian Bartlett, who is Chief Food Commercial Officer, confirmed a link between the high cost of food driving normally law-abiding people to shoplift

Labour MP, Barry Gardiner, said: ‘Which? reports that 79 per cent of customers are extremely worried about food price inflation.

‘They said one in five households are going without some foods and 13 per cent of households have skipped meals.

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‘In March 2023, the annual rate of food price inflation was the highest it had been for 45 years … 19.1 per cent.

‘This year on top of that there has been a further increase of 4 per cent. Prices keep on going up.’

Against that background, he questioned whether supermarkets are doing as much as they could to help shoppers.

The MP pointed out: ‘We have evidence … that shows that certainly the top three supermarkets … in the post pandemic years showed a 97 per cent rise in their profits.’

Last year alone, Tesco made £2.3 billion with £701m posted by Sainsbury’s and £1.1 bn for Asda.

Questioning a Tesco executive giving evidence to the DEFRA Select committee, Mr Gardiner, said: ‘You have seen a very large rise in profitability this year to £2.3 billion – up from the previous year by £882m.

‘Is there more you could be doing to help the 79 per cent of customers who are worried about putting food on the table?’

Labour MP, Ian Byrne, suggested the high cost of food is driving normally law-abiding people to shoplifting.

He asked: ‘Do we need to be thinking about price controls on essential items like baby formula milk?’

Asda made a huge profit of £1.1 bn last year. Bosses at Tesco, Sainsbury’s, Asda, Lidl and Waitrose have come under fire from MPs investigating spiralling bills

Sainsbury’s executive Rhian Bartlett, who is Chief Food Commercial Officer, confirmed a link, saying: ‘We do see over multiple decades that shoplifting moves up and down with economic progress.

‘I would say (there is a link there) as people feel under more financial pressure.’

READ MORE: Tesco profits soar by 160% to £2.3billion as UK’s largest supermarket group says price pressures are easing ‘substantially’ amid cost of living crisis

At one point, Miss Bartlett caused raised eyebrows by stating customers ‘have not suffered’.

However, she clarified this to say she meant shoppers had not suffered any shortages on shelves.

On profits she said Sainsbury’s had seen a £1 billion increase in cost prices last year and is making a modest profit of 3p for every £1 spent.

Miss Bartlett said: ‘We have been working really hard to try and manage the cost of living crisis on their (customers) behalf as best as we can.’

Commercial Director for Fresh Food at Tesco, Dom Morrey, claimed accounting measures had inflated the chain’s profits.

He accepted customers had faced ‘challenges’, but he defended Tesco saying: ‘We have reduced the price of over 4,000 items in the past year by an average of 12 per cent.’

He insisted the company has been ‘doing the right thing’ by cutting prices where it can, supporting suppliers and paying staff a good wage.

MPs also challenged the supermarkets on other ‘tricks of the trade’ that have protected their profits while leaving customers worse off.

Labour MP Barry Gardiner has questioned whether supermarkets are doing as much as they could to help shoppers

Tesco boss Ken Murphy said the chain had ‘worked hard’ to reduce prices for shoppers

Conservative MP Sheryll Murray raised concerns about shrinkflation with, for example, packs of potatoes reduced from 2.5kg to 2kg without a price cut. She also highlighted reductions in the amount of expensive ingredients such as chicken, beef and pork in ready meals.

And Labour’s Rosie Duffield questioned the use of fake farm names by some stores, particularly Tesco, to label its produce and meat.

Sue Davies, Which? Head of Food Policy, said: ‘It’s good to hear MPs take supermarkets to task for some of the examples of shrinkflation and confusing unit pricing Which? investigations have uncovered.

‘Our research has found that one in eight households are skipping meals as the cost of food crisis continues to bite, so it’s important supermarkets are doing everything they can to support their customers.

‘Supermarkets and manufacturers must be more upfront with consumers by making sure that any changes in the size or ingredients of popular products are clear, and by ensuring that unit pricing is prominent, legible and consistent in-store and online so that shoppers can easily compare prices across different brands and pack sizes.’

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