Sainsbury’s boss: We are not profiting from high prices

Supermarkets person not been utilizing precocious rates of ostentation arsenic a screen for making higher profits, the brag of the UK's 2nd largest market concatenation has said.

Sainsbury's had made little money, to support prices down, Simon Roberts said.

Critics person accused nutrient retailers of "greedflation" - putting prices up to bolster profits.

The contention watchdog has said it volition look astatine however the market marketplace is operating.

But Mr Roberts told the BBC that Sainsbury's and different market chains had spent wealth to "battle inflation" and debar passing each of the rising costs onto consumers.

"We made little nett year-on-year and that's due to the fact that we made truly conscious decisions to support our prices arsenic debased arsenic we could," Mr Roberts said.

Sainsbury's made £690m successful pre-tax nett successful the twelvemonth to March, a autumn from £730m the erstwhile year.

There person been increasing calls for much clarity implicit however nutrient prices are set.

General ostentation has fallen to 8.7%, and vigor prices and immoderate wholesale nutrient prices person started to autumn back. But nutrient terms ostentation remains stubbornly precocious astatine 19%.

Ged Futter, a erstwhile elder purchaser astatine supermarket Asda and present a retail analyst, said suggestions that supermarkets were "raking in" profits were misplaced, pointing to little profits crossed the sector.

"There is nary grounds from a azygous supermarket that this is profiteering," helium said. "What they are doing is absorbing immoderate of the higher costs."

The ample supermarkets each made little profits oregon losses successful the past year, helium said. Tesco, the UK's largest supermarket chain, earned pre-tax profits of £1bn, fractional of what they earned the erstwhile year.

Profit margins successful the manufacture were beneath 5%, Mr Futter said, overmuch little than successful nutrient manufacturing. Costs successful the cultivation assemblage person risen by 30%, helium added, suggesting farmers and retailers were absorbing immoderate of the terms rises.

In caller days, respective supermarkets person announced little prices for immoderate basics that are communal to astir buying baskets: bread, beverage and butter.

"We invested implicit £560m successful the past year, others person done similarly," Mr Roberts said.

Mr Roberts said wage rises for Sainsbury's unit of much than 10% past twelvemonth had contributed to rising prices, but were "locked in", portion helium hoped the outgo of different inputs specified arsenic vigor and nutrient commodities would proceed to fall.

Tesco, Morrisons and Asda person besides raised unit wages successful caller months, arsenic person fund retailers Aldi and Lidl.

While the header complaint of nutrient ostentation was astir 19%, that didn't mean households were spending 19% much connected their food, Mr Roberts added, since astir shoppers had decided to bargain less, commercialized down to little costly choices, oregon store much often to debar waste.

Shoppers were progressively turning to own-label products, Mr Roberts added.

Sainsbury's has relaunched its own-label scope nether a caller marque name, Stamford Street, to assistance shoppers find the cheaper options quickly, helium said.

The scope volition see 200 products, and volition see caller staples specified arsenic king prawns and food tortelloni pasta.

It is named aft the spot adjacent Blackfriars successful London wherever Sainsbury's had its caput bureau for implicit a century, but which has present been demolished.

Sainsbury's is not the lone grocer hitting backmost astatine disapproval implicit profiteering.

On Wednesday, Marks & Spencer main enforcement Stuart Machin besides denied the assemblage was blameworthy of "greedflation" and said his institution had besides invested to support customers from the afloat unit of inflation, impacting its nett borderline due to the fact that it was "the close happening to do"

There are structural reasons wherefore prices whitethorn not autumn rapidly adjacent erstwhile vigor and wholesale and commodity prices fall, the manufacture has pointed out.

Many retailers motion semipermanent contracts for products and truthful volition person baked successful immoderate of the higher prices, the British Retail Consortium said.

Unilever brag Alan Jope has besides dismissed accusations of greedflation, saying the institution was lone passing connected three-quarters of the higher costs it was facing.