City analysts have defended supermarket pricing and criticised Sir Ed Davey for encouraging accusations of price gouging levelled at the sector.
The Liberal Democrat MP and leader ‘squeezed’ and ‘managed to cajole’ the Competition and Markets Authority into probing supermarkets in 2023, analysts at broker Shore Capital alleged this week.
In a note, analysts said food inflation had understandably spiked in 2020 “in the backwash of Putin’s malevolence in 2022”, when Russia invaded Ukraine.
“That did not stop Sir Ed, ex-Post Office Minister (think Horizon) from cheaply suggesting supernormal supermarket profitability”, they added.
Shore Capital said British supermarkets were not “supernormal profiteers” and noted that their trading margins were slim.
Read the full article on the This is Money website
NAM Implications:
- Anyone close to the food retailing industry knows it is a narrow-margin, competitive business.
- Meaning also that any additional cost burdens have to be reflected on shelf.
- (and commentators will have to find other explanations for galloping inflation…)
