Supermarkets are intensifying pressure on the UK government to cut taxes on energy, aiming to help retailers avoid looming food inflation. Sainsbury's, Tesco, M&S, and Asda have all urged Labour to act, with Sainsbury's CEO Simon Roberts becoming the latest industry figure to call for Treasury intervention.
Supermarkets Warn of Food Price Pressures
On Thursday, Sainsbury's announced that the Iran war is expected to weigh on its profits, as the FTSE 100 company stated the conflict will impact both customers and businesses. The Food and Drink Federation, representing food manufacturers, forecasts food inflation will reach between 9% and 10% this year, though supermarkets have been reluctant to align with these predictions, hoping to prevent the worst price rises.
Simon Roberts Calls for Government Support
Simon Roberts, chief executive of Sainsbury's, said on Thursday: “The single biggest thing the government could do to help keep food prices down is to make sure that energy costs to the industry are not rising faster. We do everything we can to mitigate those through hedging where we can, but that would be a key area where the government could support the sector to make sure we keep down the impacts of inflation and mitigate as far as possible.”
Roberts' intervention followed similar calls from the bosses of Tesco, Asda, and Marks & Spencer in recent weeks. Last week, Tesco CEO Ken Murphy stated that “anything the government can do to help us keep prices low for customers is welcome.”
M&S and Asda Join the Call
High street retailer M&S, which also operates a food division, was the first industry leader to lay responsibility on the government for preventing shoppers' weekly food bills from rising. Chief executive Stuart Machin said in March that energy bills have “skyrocketed” due to policy costs unrelated to oil or gas prices. A day later, the executive chair of Asda, Allan Leighton, urged the government to “stand up and start doing stuff” to support farmers and ease fuel prices.
Leighton attributed food price rises to the blockage of the Strait of Hormuz, which has driven fuel and supply chain costs higher. He criticized the Treasury for pointing fingers at petrol retailers over alleged “profiteering” from the crisis, calling it “total camouflage.”
Sainsbury's Avoids Inflation Speculation
Announcing Sainsbury's results on Thursday, Simon Roberts acknowledged that the Iran war will “no doubt” create “pressure on food prices,” but emphasized the supermarket's focus on “keeping inflation at bay.” Similarly, Tesco's Ken Murphy said last week that his grocer will do “everything in its power to minimise the impact on customers.” However, Roberts was hesitant to take as strong a stance as Murphy, who said he “does not recognise” the Food and Drink Federation's warning of double-digit food inflation. When asked about the forecast, Roberts said prices will face upward pressure but declined to speculate on specific inflation levels.
Government Response Awaited
Supermarket bosses met with Chancellor Rachel Reeves earlier this month, with lower energy taxes being a key demand. However, grocers have yet to learn whether the government will act on these requests. Helen Dickinson, chief executive of the British Retail Consortium, expressed “frustration” in the industry over the delay, as reported by City AM.
