PA
Tesco has told MPs it is the “most competitive we have ever been” as supermarket chiefs were quizzed on allegations of profiteering during the cost-of-living crisis.
Asked about its profit figures, Tesco commercial director Gordon Gafa told the Business and Trade Committee: “We have not made more profit year-on-year. We have actually made 7 per cent less profit versus our last financial year. It’s important to be clear on that from the outset.”
Supermarket senior executives from Tesco, Asda, Morrisons and Sainsbury’s have been questioned by MPs over eye-watering food inflation as the latest figures add to hopes that price hikes have passed the peak.
Last week the Office for National Statistics published the latest inflation figures showing that food price rises have eased slightly but remain at a stubbornly high 18.4 per cent.
It comes as supermarkets are under increasing pressure to hand down savings they are seeing on wholesale items to consumers, who have faced punishing food price inflation in recent months.
Addressing Gafa, committee chairman Darren Jones said: “According to your 2018/19 annual accounts you made a profit of 1.6 billion and in 2021/2022 accounts you made a profit of 2.03 billion. So you’ve increased your profit quite significantly there, haven’t you?”
Gafa replied: “As I say, profits year-on-year for the group are down, we have sold more year on year and we have made less.
But Jones pressed: “How can it be possible that you are making hundreds of millions of pounds in additional profit?”
Gafa replied: “I’m referring to our latest accounts for 2022/23 so that may be the discrepancy.”
According to the International Monetary Fund, rising corporate profits were the largest contributor to Europe’s inflation over the past two years as companies increased prices by more than the spiking costs of imported energy.
Profits account for 45 per cent of price rises since the start of 2022, according to a new paper which breaks down inflation, as measured by the consumption deflator, into labour costs, import costs, taxes, and profits.
