Blaming supermarkets for high food prices? Good politics but unfair

An analysis of the numbers makes it hard to pin charges of ‘greedflation’ on supermarkets, writes James Moore

It doesn’t stack up: food security should be looked at before we start pointing fingers at shops (PA)

Profiteering supermarkets: it is absolute rubbish to oppose an investigation,” declared the Liberal Democrats in a furious press release. They were responding to the British Retail Consortium’s Andrew Opie. When Sir Ed Davey’s claim of supermarkets “unfairly” using inflation as cover to feather their own nests – what has been termed “greedflation” – was put to him on the BBC’s Today programme, Opie described it as “absolute rubbish”. That’s telling ’em!

So who’s right? Well if you look at the most recent figures from the two biggest stockmarket-listed supermarkets – that would be Tesco and Sainsbury’s – you’ll see some big numbers. Tesco made £1bn in its most recent financial year on £66bn of sales. Sainsbury’s chipped in with £690m of profits from £35bn sales.

Those are big numbers for sure. But consider that Tesco’s profits halved and Sainsbury’s represented a sharp decline. That puts the figures in a different light. We should also consider the margins. Tesco gives us what it calls an “adjusted operating margin”, which is not a number I love because of the “adjusted” part. Adjusted how?