// Asda chair Lord Rose said plans to introduce a price cap in grocery were backward looking
// He defended the industry against claims of profiteering
Asda boss Lord Rose has dismissed suggestions of price capping for supermarkets as “backward looking” and warned that it could lead to “unintended consequences”.
Speaking to Sky’s Ian King Live programme, Rose commented on Rishi Sunak’s plans to ask supermarkets to bring in voluntary price caps on essential products: “In real terms, the cost of food, the cost of clothing, the cost of electronics has come down over the last 20, 30, 40 years, largely due to the efficiency of retailers.”
He continued: “Governments of any complexion owe us a debt of gratitude, and this recent speculation over the last couple of days about fixing prices is, frankly, rather backward looking.”
According to the British Retail Consortium, food price inflation across the UK was 15.4% in the year to May.
However, Rose pointed out that profits from the big supermarkets have fallen over the past year, dismissing claims of profiteering.
Back in April, Tesco revealed pre-tax profits had plunged 50% to £1bn for the year to February.
Meanwhile, Sainsbury’s underlying pre-tax profit dropped from £730m to £690m this year as it tried to keep prices low.
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While Asda, which is not a publicly-listed company, has not unveiled its profits, Rose suggested they had also declined. “They’ve all gone backwards,” he claimed.
Rose also rejected suggestions that grocery retailers should be met with a windfall tax like that given to oil and gas companies:
“You can’t interfere with market forces. At the end of the day, you have to trust us as retailers to give our consumers the best deals.”
Calling customers “savvy” and “smart”, Rose argued against intervention, saying it always brings unintended consequences and adding that he “would not recommend it”.
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