Tesco PLC (LSE:TSCO) and J Sainsbury PLC (LSE:SBRY) senior staff have again found themselves denying allegations of profiteering as food inflation stubbornly remained in the double digits this month.
Senior staff were called in front of Parliament’s Business Select Committee on Tuesday to give evidence over high fuel and food prices, with the latter climbing 14.6% in the year to June.
“We are the most competitive we have ever been,” Tesco commercial director Gordon Gafa told MPs during the hearing, pointing to the chain’s ‘Aldi price match’ offerings.
“We have not made more profit year-on-year,” he added, suggesting the question of profiteering on the back of high inflation should be tackled “head on”.
Comparing Tesco’s profits from 2019 and 2022, MP Darren Jones then pointed out that the supermarket giant’s earnings had jumped from £1.6bn to £2.0bn between the two years.
“Given the Covid pandemic, the energy crisis, the increased costs of supply, the increased costs for your customers, how can it be possible that you’ve made hundreds of millions in additional profit,” he asked.
Gafa proceeded to deny the company had generated higher profits on an adjusted basis, suggesting there may be “discrepancies” in the documents the two were comparing.
Asda chief commercial officer Kris Comerford echoed similar comments that the UK retail sector was “the most competitive,” with Sainsbury’s following a similar line.
According to the British Retail Consortium, UK shop inflation eased to 8.4% in June from 9.0% in May, but food prices remained in the double-digits at 14.6%.
Prices of wholesale fuel and commodities such as brent, crude, wheat, palm oil and corn have fallen year-on-year meanwhile, after being pushed up in by Russia’s invasion of Ukraine.
All four representatives from the supermarkets said they would not back a proposed government-imposed cap on certain food products during the meeting.
The meeting follows ongoing scrutiny of supermarkets over sustained high grocery prices, with critics previously accusing the companies of “astonishing corporate greed” as consumers face squeezed pockets.