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Great Britain. The largest supermarket chains will explain their high prices to the parliamentary committee

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British supermarket chains will be questioned by MPs on Tuesday why food prices continue to rise while some wholesale costs are falling. Representatives of the largest chains: Tesco, Sainsbury’s, Asda and Morrisons will appear before the parliamentary committee examining the cost of weekly shopping, the BBC’s portal reported.

According to the latest data, commodity prices continue to rise, but not as sharply as in recent months. According to the British Retail Consortium, inflation food prices in June amounted to 14.6 percent. y/y This is down from 15.4 percent. rdr in May, the British portal reported. Helen Dickinson, head of the British Retail Consortium, said: “If the current situation continues, food inflation should fall to the single digits later this year.”

Rise in food prices in the Islands

Food prices remain a key reason why the UK inflation rate remains high. Many households are struggling with rising rents or mortgage costs, so supermarkets are under pressure to explain their persistently high shopping costs.

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He added that on Tuesday, MPs would be questioning supermarket bosses on food and fuel price inflation, asking if prices would fall this year. Politicians, trade unionists and the governor of the Bank England they are curious why prices on supermarket shelves have not fallen as fast as the cost of certain ingredients such as wheat. They suggested that retailers may simply be amassing profits. The Competition and Markets Authority is investigating this issue.

High prices on the shelves, high profits

Supermarkets deny that they profit from the high prices and claim that their profits are being cut. Chains say they are cutting prices where they can. They argue that commodity price declines take time. Most major chains have recently launched high-profile cuts in the price of staples, with Sainsbury’s announcing on Monday it will be investing £15m to cut the cost of staples such as rice, pasta and chicken, the portal reported.

He also pointed out that Tesco, Morrisons, M&S, Aldi and Lidl have cut prices for staple foods such as bread, milk and butter over the past few months. However, some items such as milk and eggs remain relatively expensive compared to pre-COVID-19 prices.

Asda’s retail analyst and former senior purchasing manager Ged Futter said, in addition to pointing to recent price cuts, directors are likely to tell the commission that wholesale prices have not fallen for all goods. “Yes, the prices of some things have gone down, but others have gone up, such as sugar, potatoes and chocolate,” he said.

The British are waiting for price drops

Severe weather conditions meant lower supplies of UK-grown potatoes, carrots and onions, meaning more had to be imported. Wheat, which has fallen in price on world markets, is largely supplied by UK farmers and food producers will continue to buy last year’s crop at last year’s prices, explained Futter. – There will be no new price until a new contract is made. Just because prices have fallen globally, it doesn’t mean that prices here will drop immediately, he said.

Similarly, the cheese sold today was made from milk purchased up to 12 months ago, so it won’t reflect recent declines milk prices he explained.

The British Retail Consortium previously said price drops are typically reflected in stores with a delay of three to nine months. Futter believes supermarket directors will point to other costs affecting food retail – from rising wages to extra Brexit-related fees such as veterinary certificates.

A study last month by researchers at the London School of Economics found that almost a third of food price inflation since 2019 was due to Brexit, the BBC reported.

Main photo source: Shutterstock

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