CMA report shows grocery market is as competitive and efficient as ever
Responding to the CMA report released today, Helen Dickinson, Chief Executive of the BRC, said:
“We welcome the CMA report which confirms that despite the challenges caused by rising costs throughout the supply chain, the grocery market remains as competitive and efficient as ever. Indeed, retailers have gone above and beyond to try and protect consumers from rising costs in the supply chain, with operating profits falling “significantly to below historic levels”.
“Supermarkets have been working hard to support their customers through the cost of living crisis and will be reflecting on the CMA’s recommendations on unit pricing. The CMA itself notes that “many of these problems stem from the rules themselves”, and retailers stand ready to support proposed changes to the unit pricing rules.
“As noted in the report, supermarket margins have remained extremely tight as they try to support their customers and absorb the worst of the rising costs in the supply chain. In the last few months, some of these pressures have begun to ease, such as with global commodity prices and the weakness of the pound."
Notes:
The report notes on reasons for price rises:
“On competition in groceries, the evidence we have seen indicates that recent high price inflation for groceries does not appear to date to have been driven at an aggregate level by weak or ineffective competition between retailers.”
On profits/profiteering:
“Having remained steady in 2020/21 and 2021/22, operating profits of the 11 national retailers fell significantly – in aggregate by 41.5% and as a percentage of revenues from 3.2% to 1.8% – to below historic levels, in the most recent financial year (2022/23). This indicates that they have not ‘passed through’ to consumers all of the cost increases that they have incurred.”
On unit pricing:
“Many of these problems [on unit pricing] stem from the rules themselves, which permit unhelpful