Drivers must accept higher petrol prices in order to keep food bills low, the boss of Sainsbury’s has suggested, amid claims that supermarkets have increased fuel margins.
“That means that any benefit we see from any other part of our business, whether that be in Argos [which is owned by Sainsbury’s], whether that be in the bank, whether that be in fuel, gets invested right back into the food business, to keep our food prices as low as they possibly can be,” Simon Roberts, chief executive of Britain’s second-largest supermarket said, adding Sainsbury’s was “absolutely focused on food first” when it came to prices.
Roberts added that overall Sainsbury’s was making less profit and its margins were down.
He said Sainsbury’s was “really competitive on fuel” and that the supermarket had not set a margin target for how much profit it took from fuel, instead adopting a “passive” approach based on rivals’ prices, The Telegraph reported.
It follows criticism on Monday (3) from ministers that retailers were using motorists as “cash cows” after an investigation by the monopolies watchdog found that supermarkets including Sainsbury’s had been overcharging drivers at the pump.
Morrisons responded by saying that a “modest increase in profitability in fuel” was key to its ability to invest in prices in its stores. Roberts said overall Sainsbury’s was making less profit and its margins were down.
Sainsbury’s said on Tuesday (4) that food inflation was starting to fall, leading to shoppers buying more when in stores.
Roberts said grocery inflation at Sainsbury’s is currently running at around half the rate of the headline figure reported by the Office for National Statistics for food and drink which stood at 18.4 per cent in June.
He said inflation was falling fastest in areas including fresh food. Supermarkets have faced growing scrutiny over prices in recent months, with bosses last week called to appear before MPs to answer questions on potential profiteering and explain what they were doing to help ease pressure on households.
However, they have claimed those price cuts are being passed on to shoppers as quickly as possible.