Supermarkets are not passing rising costs onto consumers, says CMA

Supermarkets are not passing rising costs onto consumers, says CMA

The latest report from the Competition and Markets Authority (CMA) has found that supermarket competition issues have not been driving food price inflation up.

Rising supermarket costs have not been fully passed on to customers.

The CMA has assessed how retail competition is working in the UK grocery sector, focusing on the extent to which supermarket competition affects the lowering of prices on their shelves.

In the retail grocery sector, operating profits fell by 41.5% in 2022/23 when compared with the previous year, and average operating margins fell from 3.2% to 1.8%. According to the CMA’s report, this is because retailers’ costs are rising faster than their revenues – this indicates that rising costs have not been fully passed on to customers.

Sarah Cardell, CEO of the CMA, spoke on the report’s findings on competition between retailers in the grocery sector, saying: “The overall evidence suggests a better picture than in the fuel market, with stronger price competition between all of the supermarkets and discounters. In the next phase of our work, we will examine competition and prices across the supply chain for the product categories we’ve identified. We’ll also continue to monitor the situation to ensure that competition remains effective as input costs start to fall.”

Labelling legislation

The CMA has also called for stronger Government legislation regarding supermarket product pricing, stating that it needs to be clearer in order to benefit consumers who want to save money on their food shop.

It set out recommendations on unit pricing rules, and has written to retailers that are not complying with the PMO expecting them to address the CMA’s concerns or risk enforcement action.

Previous / Next posts...

Submit a Comment

Your email address will not be published. Required fields are marked *