Skip to main content

Editorial: How the supermarket kingpins are robbing us all blind

SUPERMARKET theft has long been a problem, despite all attempts to counteract it.

The chief offenders are forever devising new ways to maximise their haul, oblivious to the anti-social impact. We’ve all heard their excuses when caught: “Times are tough,” “I need my money for other things,” “Other people depend on me to bring home the bacon,” “I only take what I need,” and, “Everyone else would do it if only they had the nerve.”

Such characters rarely show contrition when caught.

For example, here’s Ken Murphy, chief executive of Tesco: “Our profits fell by 7 per cent despite the fact that we achieved a record level of cost savings … That for me is a very material proof point that we worked very hard for both customers and for colleagues this last financial year.”

He was defending his company’s £2.5 billion profit in the last financial year.

Murphy pleaded that Tesco had not hiked its prices by as much as its main competitors. Together with Sainsbury’s, Asda and Aldi, the “big four” monopolies account for two-thirds of all grocery sales. Adding Morrisons and Lidl brings the market share to 86 per cent.

Food prices in Britain are currently rising at the rate of 19 per cent a year. The biggest increases are in the staple goods of many working-class households: dairy products, sugar, pasta, flour and other wheat products.

Of course, energy price rises and the Ukraine war have played a major part in driving up costs and therefore prices, especially in Britain which imports almost half its food. Who, if anyone, has profited? Not producers in the developing countries, that’s for sure, but the giant oil, gas and electricity corporations.

Certainly, local dairy farmers are not enjoying any benefit, hit by their own soaring energy, feed and fertiliser costs and squeezed by their main customers — the big supermarkets.

Workers’ wages are usually cited by right-wing politicians and the media as the chief culprits for inflation. Yet pay settlements in the supermarket sector are running at between just 6 and 10 per cent (albeit more for some warehouse workers).

The main food and drink manufacturers have seen little or no overall increase in profits or dividend rates over the past 12 months, with some making a loss after years of profiteering.

No, the chief beneficiaries of food and drink price inflation are the monopoly retailers.

Tesco, Sainsbury and Asda reaped more than £4bn profits in the last financial year. They have passed on most if not all of their cost increases to customers. But they are looking after those most in need — their shareholders.

Between them, the “big three” doled out £1.4bn in dividends in 2022, the biggest increase for seven years at Sainsbury’s, topped by the 60 per cent rise — including bonanza share buybacks — at Tesco; Asda has sent £75m to its main owners, the Qatari Investment Authority and Daniel Kretinsky.

Generous remuneration packages helped chief executives avoid a visit to the local foodbank last year: unrepentant Murphy pocketed £4.5m, while Sainsbury’s chief executive Simon Roberts struggled by on £3m.

However, Asda chair and multimillionaire Lord Stuart Rose has declared his opposition to cost-of-living wage rises this year… for striking public-sector workers.

He also deplores the Tory government’s attempts to persuade supermarkets to curb price rises. “You can't interfere in the market,” this champion of the EU “free market” has warned Rishi Sunak.

How wrong they both are. The remedy for rocketing food bills is obvious: impose statutory price controls on key products and curb dividends.

OWNED BY OUR READERS

We're a reader-owned co-operative, which means you can become part of the paper too by buying shares in the People’s Press Printing Society.

 

 

Become a supporter

Fighting fund

You've Raised:£ 9,944
We need:£ 8,056
13 Days remaining
Donate today