A new poll shows that while food inflation eases, many British shoppers still believe supermarkets are profiteering, a sentiment that echoes recent concerns among Canadian and American consumers about grocery price hikes.
Some 70 per cent of UK voters believe that supermarkets are making "excessive" profits from food inflation, according to the latest City AM/Freshwater Strategy poll.
A total of 43 per cent of Brits polled "agree slightly" with the suggestion that supermarkets are unfairly profiting from rising prices, while 27 per cent said they strongly believe that grocers are engaging in price gouging.
The findings come after John Healey warned retailers against ramping up prices unnecessarily before admitting he had not seen any signs it was happening.
Writing in the Sunday Telegraph, Healey said he was prepared to crack down on any retailers taking shoppers "for a ride" by using the soaring energy and supply costs caused by the closure of the Strait of Hormuz as an excuse to raise prices.
"Companies' willingness to work with the government throughout this crisis has been positive, and there has been no significant evidence of so‑called price gouging, but I want to be blunt in reassuring the public that our regulators have the powers to clamp down on it if it happens," Healey said.
Retailers hit back at the Chancellor's suggestion that they might be profiteering. The British Retail Consortium (BRC), which represents the UK's biggest retailers including Sainsbury's, Tesco and Asda, said it is prepared to prove that it is keeping prices down.
Jim Bligh, the BRC's corporate affairs director, told City AM: "It's not helpful for the Chancellor to label retailers as potential profiteers when it's one of the UK's lowest margin industries."
In Canada, the Competition Bureau has warned retailers to avoid exploiting supply‑chain pressures, and consumer groups have called for greater pricing transparency. Similarly, U.S. regulators have faced pressure to monitor grocery pricing after earlier spikes in food costs.
Voters who believe the sector is price gouging were split by party allegiance. Some 79 per cent of Green voters and 75 per cent of Labour voters polled said they believe that grocers are profiteering, compared to just 56 per cent of Conservative voters.
Grocers make only 3p profit per pound. Brits' perceptions of supermarket price gouging come despite food inflation slowing in recent months, reaching as low as 1.7 per cent in June.
Food industry figures had warned that inflation could reach as much as 10 per cent later this year, but the BRC says that intense competition among retailers is keeping a lid on rising prices.
Public perception of grocery profits
Around 70 per cent of voters believe that supermarket prices are still rising, though at a slower rate than before, while 14 per cent think that inflation is accelerating, according to the City AM/Freshwater poll.
When asked to estimate grocers' profit taken from every pound spent, voters put the figure at 32p, more than 10 times the actual level.
When told that supermarkets make only 3p in profit from each pound in sales, Brits' belief that grocers are price‑gouging fell to just 32 per cent.