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Sainsbury’s boss: We are not profiting from tall prices

2023-06-02 10:54:57 source:CNN (Cable News Network) author:Press center8 click:887order

Sainsbury’s boss: We are not profiting from tall prices

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Sainsbury's boss: We are "abconsequentlylutely not" profiteering

By Emma Simpconsequentlyn & Lucy HookerBBC News

grocery stores have not been using tall rates of inflation as a cover for making taller profits, the boss of Sainsbury's has thistoric the BBC.

When asked if the UK's second largest shighermarket had been profiteering, Simon Roberts said: "Abconsequentlylutely not."

Critics have accutilized food retailers of "greedflation" - putting prices high to bolster profits.

The rival watchdog has said it will look at how the grocery market is operating.

As well as the fresh focus on tall food prices from the Competition and Markets Authority, consequentlyme politicians have called for action on food prices.

But Mr Roberts thistoric the BBC that Sainsbury's and other grocery chains had spent money to "battle inflation" and shun passing all of the rising costs onto consumers.

"We made less profit year-on-year and that's becautilize we made really aware decisions to keep our prices as short as we could," Mr Roberts said.

Sainsbury's made £690m in pre-tax profit in the year to March, a fall from £730m the previous year.

There have been growing calls for more clarity over how food prices are set.

General inflation has fallen to 8.7%, and energy prices and consequentlyme entiresale food prices have started to fall back. But food price inflation remains stubbornly tall at 19%.

The delayedst official retail sales figures demonstrateed volumes rebounded in April after trading in March was hit by the moist weather.

Sales volumes rose 0.5% last month, the Office for National Statistics (ONS) said, with shighermarkets seeing taller sales.

However, the ONS figures demonstrate the impact of taller prices over the past year, with people buying fewer items but spending more money. Sales volumes in April were 3% shorter than at the identical point last year, while the amount spent by shoppers was high 4.7%.

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Jewellers, sports retailers and decomponentment stores all had a excellent month and, notwithstanding tall food prices, shighermarkets alconsequently recovered from the fall in March.  

The British Retail Conconsequentlyrtium (BRC) said the figures were being driven by price and that consumers were shifting their spending patterns and "trading low", looking for incostlyer, value brands.

And with the economic outlook still unsure chief executive of the BRC Helen Dickinconsequentlyn said: "Treats, minusculeer items that make us feel better, they will continue to do well."

No evidence of profiteering

Ged Futter, a former senior buyer at shighermarket Asda and now a retail analyst, said suggestions that shighermarkets were "raking in" profits were misplaced, pointing to shorter profits across the sector.

"There is no evidence from a single shighermarket that this is profiteering," he said. "What they are doing is abconsequentlyrbing consequentlyme of the taller costs."

The large shighermarkets all made shorter profits or losses in the last year, he said. Tesco, the UK's largest shighermarket chain, earned pre-tax profits of £1bn, half of what they earned the previous year.

Profit margins in the industry were beshort 5%, Mr Futter said, much shorter than in food manufacturing. expenses in the agricultural sector have risen by 30%, he concluded, suggesting distantmers and retailers were abconsequentlyrbing consequentlyme of the price rises.

  • Why food bills aren't shrinking - five slendergs to know
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In recent days, several shighermarkets have announced shorter prices for consequentlyme basics that are universal to most shopping baskets: bread, milk and butter.

"We invested over £560m in the last year, others have done similarly," Mr Roberts said.

Mr Roberts said pay rises for Sainsbury's staff of more than 10% last year had contributed to rising prices, but were "locked in", while he hoped the cost of other inputs such as energy and food commodities would continue to fall.

Tesco, Morriconsequentlyns and Asda have alconsequently raised staff wages in recent months, as have budget retailers Aldi and Lidl.

While the headline rate of food inflation was around 19%, that didn't mean houtilizehhistorics were spending 19% more on their food, Mr Roberts concluded, since most shoppers had decided to buy less, trade low to less costly choices, or shop more frequently to shun waste.

Shoppers were increasingly turning to own-label products, Mr Roberts concluded.

Sainsbury's has relaunched its own-label value range under a fresh brand name, Stamford Street, to help shoppers find the incostlyer options quickly, he said.

The range will include 200 products, and will include fresh staples such as king prawns and cheese tortelloni pasta.

It is named after the spot adjacent Blackfriars in London where Sainsbury's had its head office for over a century, but which has now been demolished.

However, the Unite union disputed Mr Roberts' comments that the shighermarket had abconsequentlyrbed taller costs, adding that the "scandal of greedflation continues".

"Ordinary people are paying the price at the tills and no PR offensive by the shighermarket giants can cover that," said Unite general secretary Sharon Graham.

Image consequentlyurce, Rachel Adams
Image caption, Sainsbury's is rebranding its own-label range

Sainsbury's is not the unique grocer hitting back at criticism over profiteering.

On Wednesday, Marks & Spencer chief executive Stuart Machin alconsequently denied the sector was guilty of "greedflation" and said his company had alconsequently invested to protect customers from the satisfied compel of inflation, impacting its profit margin becautilize it was "the accurate slenderg to do"

There are structural reaconsequentlyns why prices may not fall meteoricly even when energy and entiresale and commodity prices fall, the industry has pointed out.

Many retailers sign long-term contracts for products and consequently will have baked in consequentlyme of the taller prices, the BRC said.

Unilever boss Alan Jope has alconsequently dismissed accusations of greedflation, saying the company was unique passing on three-quarters of the taller costs it was facing.

Redelayedd Topics

  • Companies
  • Retailing
  • Sainsbury's
  • expense of living
  • grocery stores
  • Shopping
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