Supermarkets told to make major change so shoppers can save cash in cost-of-living crisis
SUPERMARKETS have been told to make their prices easier to understand so shoppers can save cash in the cost-of-living crisis.
The warning from the competition watchdog came as it cleared the stores of “greedflation” — using higher prices to make excess profits.
But the Competition and Markets Authority has also ordered retailers to make “unit prices” on shelves clearer.
It said it was hard for shoppers to compare the price of rival teas if one was priced per 100g and another was priced per teabag.
Sarah Cardell, boss of the CMA, said: “We’ve found that not all retailers are displaying prices as clearly as they should, which could be hampering people’s ability to compare product prices. We’re writing to these retailers and warning them to make the necessary changes or risk facing enforcement action.”
The CMA’s report found food retailers’ operating profits had slumped by 41.5 per cent in the past year while industry average profit margins had also shrunk from 3.2 per cent to 1.8 per cent.
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It said that this showed rising costs had not been passed on in full to customers.
And it added shoppers were increasingly switching between stores for the best deals, and flocking to budget options Aldi and Lidl, which showed chains were not able to raise prices without losing customers to their competition.
Bosses of Tesco, Sainsbury's and Asda had all argued that they have been protecting shoppers from the highest level of inflation and operating on wafer-thin margins as a consequence.
But while they have been found not to have profiteered, big food companies such as Magnum-maker Unilever, Kit Kat-maker Nestle, and Cadbury owner Mondelez have been booking bigger sales and protecting their profit margins.
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The CMA has said that there were some signs supermarkets are starting to rebuild their profit margins — but warned them to keep lowering prices for shoppers, as the cost of labour, shipping, fuel and ingredients falls.
IT'S STALL GRAVY
THE maker of Bisto, Ambrosia and Batchelors Super Noodles has said it will not increase its prices any further this year as it believes cost- inflation is now past its peak.
Premier Foods has come under fire for raising the price of its Ambrosia rice pudding brand 76 per cent while its Bisto gravy was hiked by 50 per cent — higher than industry food inflation.
The hiked prices have boosted profits and yesterday the business said that its profit would be at the top end of analyst expectations.
M&S LOSES MARBLES
THE boss of Marks & Spencer has accused Michael Gove of being “utterly pathetic” and “nonsensical” after the Secretary of State blocked the retailer’s plans to redevelop its Marble Arch store.
Stuart Machin has spent the past two years working on a proposal to demolish the ageing 1920s central London store and redevelop it with a ten-storey building that had less shopping space and more offices.
The M&S chief has said that it will have to consider simply shutting the store as retrofitting it isn’t an option.
The Department for Levelling Up, Housing and Communities announced Mr Gove had refused permission amid concerns the process would generate more carbon pollution.
Mr Machin called it “an anti-business approach” and said Mr Gove had “signalled he is more interested in cheap-shot headlines than facts and if it weren’t so serious it would be laughable”.
A Government source said that “it wasn’t just a tantrum, it was an M&S tantrum”.
OUT OF LOOKERS
A £465MILLION takeover of car dealership Lookers looks set to collapse after its biggest shareholder, Cinch, pulled its support for the deal.
Initially Cinch, which has a 19 per cent stake, received support from the Lookers board for the proposed sale of the second-hand car company to Canada’s Global Auto Holdings.
Although Lookers shares have since tumbled by 9 per cent, industry sources think there is a high chance of a better offer coming in for Lookers from a rival bidder.
EASYJET'S HOPE FOR SUMMER
THE boss of easyJet has said he does not expect to cancel more summer holiday flights, amid hopes baggage-handlers will call off their strikes and accept a new pay deal.
Fears grew this month that Brits faced another summer of travel chaos after easyJet cancelled 17,000 flights and Gatwick Airport workers threatened to walk out during the busiest holiday season.
EasyJet’s baggage-handler DHL has since suspended four days of strikes while being ballotted on a new pay offer.
Johan Lundgren, chief exec, said that the airline was much better staffed and equipped than last year.
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Despite the cost-of-living squeeze, he said consumers had made going on holiday a “number one priority”.
EasyJet says it will make record profits this summer after swinging to a £203million profit in the past three months, against a £114million loss for the same period in 2022.
39 VIRGIN BANKS GO
VIRGIN MONEY is shutting a further 39 branches as more customers are choosing to bank online.
It said customer transactions had fallen 43 per cent since 2020 — and 96 per cent of these customers use the bank less than once a month. The lender closed another 30 branches in 2021.
Together, high street banks have shut over 1,000 branches in two years, raising fears over access to cash for households and small businesses.