Key facts
- 70% of UK voters believe supermarkets are making excessive profits from food inflation.
- 43% of polled Brits 'agree slightly' that supermarkets are unfairly profiting from rising prices.
- 27% of polled Brits 'strongly believe' grocers are engaging in price gouging.
- Chancellor John Healey warned retailers against using rising costs as an excuse to raise prices.
- The British Retail Consortium stated that the grocery industry is one of the UK's lowest margin industries.
- Food inflation slowed to 1.7% in June.
- Voters estimated grocers' profit at 32p per pound, while the actual profit is 3p per pound.
A significant majority of UK voters, 70%, believe that supermarkets are profiteering from food inflation, according to a recent City AM/Freshwater Strategy poll. This perception persists despite slowing food inflation rates, which reached 1.7% in June, and Chancellor John Healey's acknowledgment that there is little evidence of widespread price gouging.
Healey had previously warned retailers against using increased energy and supply costs, exacerbated by global events like the Iran war and the closure of the Strait of Hormuz, as an excuse to inflate prices. He stated that regulators have the power to clamp down on such practices if they occur.
However, the British Retail Consortium (BRC), representing major grocers like Sainsbury's, Tesco, and Asda, pushed back against these suggestions. Jim Bligh, the BRC's corporate affairs director, emphasized that the grocery sector operates on very low profit margins, making it unhelpful to label retailers as potential profiteers.
The poll also revealed a split in opinion based on political allegiance, with higher percentages of Green and Labour voters believing in supermarket profiteering compared to Conservative voters. The findings come as food inflation has decelerated, contrary to earlier warnings of potential 10% inflation later in the year, attributed by the BRC to intense competition among retailers.
Furthermore, the poll highlighted a significant disconnect between public perception and reality regarding profit margins. Voters estimated that supermarkets make 32p in profit for every pound spent, more than ten times the actual figure of 3p. When informed of the actual profit margin, belief in price gouging among respondents fell to 32%.