UK consumer group calls for government action on grocery prices

Reuters

Published Jul 16, 2023 07:10PM ET

Updated Jul 16, 2023 07:32PM ET

By James Davey

LONDON (Reuters) - British consumer group Which? has urged the government to take action to support households when the competition watchdog publishes its review of grocery pricing, saying some food prices have jumped by as much as 175% since 2021.

Based on analysis of more than 21,000 food and drink products at market leader Tesco (OTC:TSCDY), Sainsbury's, Asda, Morrisons, Aldi, Lidl, Waitrose and Ocado (LON:OCDO), Which? found that supermarket prices rose by 25.8% between June 2021 and June 2023.

Food prices have been driven up by increased costs for animal feed, fertiliser and fuel as well as energy and labour. Poor harvests, bird flu and a weaker pound have compounded matters.

However, Which? said its findings show some supermarket products have been hit with disproportionately high inflation.

The Competition and Markets Authority (CMA) is due to update on competition and pricing in the grocery sector this month. It has previously said it had not found evidence pointing to specific concerns.

"If competition issues are found, the CMA should be ready to take appropriate action," Which? said, adding that finance minister Jeremy Hunt should also provide an update on his progress on agreeing measures with industry to ease the pressure on consumers.

UK supermarkets have rejected allegations that they have profiteered through a cost of living crisis.

Responding to Which?, the British Retail Consortium, which represents the major supermarkets, said retailers had not passed on to consumers all the cost pressures they have faced.

"The hard work being done by retailers to absorb cost increases means the UK offers among the cheapest grocery prices in Europe," said BRC Chief Executive Helen Dickinson.

She also pointed out that the prices of some key staples, such as butter and bread, have begun to fall in recent weeks.