Asda chairman says supermarkets owed ‘debt of gratitude’ as he snubs profiteering claims
Asda’s chairman said supermarkets are owed a “great debt of gratitude” as he rebuffed claims that the grocer is profiteering from rising petrol and food prices amid the cost of living crisis.
Speaking to LBC, Stuart Rose said that all retailers have seen their profits over the last year go “backwards”.
“If you look at what we make at Asda, we make 1.7p for every pound that you pay us. So we’re making 1.7 per cent,” he said.
“Tell me what person would universally start a business on that basis today. All retailers over the last 12, 14, 16 months have gone backwards in terms of profit.”
He added that the business could no longer afford to sell petrol as a loss leader, which it had done on some occasions previously.
“Governments of any colour owe us a great debt of gratitude, never has the cost of food, the cost of clothing, or the cost of electronics been so cheap in real terms in terms of disposable income,” he added.
Asda has been under government scrutiny in recent months due to its pricing tactics during a period of economic downturn.
In June, the supermarket was fined £60,000 by the competition watchdog for failing to co-operate properly with a Competition and Markets Authority probe into fuel prices.
It followed an investigation that found competition at the pumps had “weakened” due to supermarkets driving up profit margins.
Yesterday, MPs also wrote to one of Asda’s owners, Mohsin Issa, raising concerns that the grocer’s ownership structure could be holding back its ability to help shoppers amid the cost of living crisis.
Labour MP Darren Jones asked the billionaire brothers who bought the supermarket chain in 2020 for details on its corporate structure and petrol profit margins.
“The committee has concerns that the complex company structure within which Asda sits, and associated decisions on financing, may restrict your ability to help meet cost-of-living pressures on your customers,” an excerpt from the letter read.
It follows Issa’s grilling in parliament earlier this summer over the firm’s pricing strategy and treatment of staff.