Supermarkets have got us enraptured by their price hikes
Research has shown that you lot (British shoppers) are pretty content with your supermarkets, even though food prices are rising steeply. After all, prices are going up aren’t they? That’s what’s happening everywhere, and the likes of Tesco and Sainsbury’s are just passing on their own rising costs, right? Not quite.
A boffin claims that UK supermarkets are making a pretty penny out of the increase in food prices, passing on their own rising costs and then some, duping us poor saps into parting with even more cash than we actually could be.
That boffin is Jim Leaviss, head of retail fixed interest at M&G, the fund management arm of the Prudential, and he reckons we’ve all got Stockholm Syndrome, the phenomenon where kidnap victims fall in love with their captors. Yes, the supermarkets have got us all trussed up in a basement and they’re only letting us go to the toilet twice a day.
Food price inflation in the UK is currently 4.7 percent, against 2 per cent in the rest of the eurozone, but research suggests that we’re all happy with the increases and are generally happy with the evil supermarkets.
Jim says: “When food price inflation started to moderate post the last shock in 2008, European food retailers cut prices. In the UK the supermarkets realised that they had pricing power and kept raising them; this resulted in the strong relative profitability that they enjoyed.”
Still love your supermarket of choice now? Not so sure? Perhaps you’ll start fighting back, rearranging the shelves and putting items down really far away from where they should be next time you’re in...