Sainsbury’s boss rubbishes allegations of ‘greedflation’

Simon Roberts (REUTERS/Toby Melville/File Photo)

Supermarkets have not been using high rates of inflation as a cover for making higher profits, the boss of Sainsbury’s has said, denying allegations of “greedflation”.

Roberts told the BBC that Sainsbury’s and other grocery chains had spent money to “battle inflation” and avoid passing all of the rising costs onto consumers.

“We made less profit year-on-year and that’s because we made really conscious decisions to keep our prices as low as we could,” Roberts said.

Supermarkets are being accused of indulging in “greedflation” by putting prices up to bolster profits. The competition watchdog has said it will look at how the grocery market is operating. As well as the new focus on high food prices from the Competition and Markets Authority, some politicians have called for action on food prices.

Sainsbury’s made £690m in pre-tax profit in the year to March, a fall from £730m the previous year. There have been growing calls for more clarity over how food prices are set.

General inflation has fallen to 8.7 per cent, and energy prices and some wholesale food prices have started to fall back. But food price inflation still remains high at 19 per cent. The latest official retail sales figures showed volumes rebounded in April after trading in March was hit by the wet weather.

Sales volumes rose 0.5 per cent last month, the Office for National Statistics (ONS) said, with supermarkets seeing higher sales.

However, the ONS figures show the impact of higher prices over the past year, with people buying fewer items but spending more money. Sales volumes in April were 3 per cent lower than at the same point last year, while the amount spent by shoppers was up 4.7 per cent.