Our supermarkets are showing remarkable restraint. The previous Chancellor and now the new one can’t resist slandering them. In an article for The Sunday Telegraph, John Healey writes that ‘we will be watching closely for any suggestions that customers are being taken for a ride at the pump or the till’. If there’s any evidence of British shoppers being ripped off then he assures readers that ‘our regulators have the powers to clamp down on it’.
The truth is that supermarkets are a miraculous innovation whose praises are not sung enough
Gee thanks, John. Trouble is, ‘price gouging’ is a made up, dishonest, dog whistle myth. We know this because, in the same article, Healey tells us so: ‘Companies’ willingness to work with the Government throughout this crisis has been positive, and there has been no significant evidence of so-called price gouging’. And he’s correct.
The truth is that supermarkets are a miraculous innovation whose praises are not sung enough. Far from being profit factories British supermarkets are so competitive and so efficient that cheap food in Britain is more affordable than anywhere else in the world.
If we didn’t have supermarkets and were still going to the butchers and the green grocers food would be a lot more expensive and millions of us would be in real, genuine food poverty. As a proportion of income food is much much lower than it has been historically – chiefly thanks to the wafer thin margins that our supermarkets operate at. You don’t go into the supermarket business if you want to be really rich.
But Reeves, and now sadly Healey, are able to exploit the price gouging myth because of poor public understanding of this great truth of our supermarkets. When the pollster Freshwater Strategy asked the British public to estimate the profit margins of various industries they guessed that supermarkets were making 50 per cent on everything they sold. The reality: more like 3 per cent.
It's this misunderstanding that allows Healey to dog whistle about evil profiteers and price gougers – even if he himself concedes there’s no evidence for it – because he knows it’s a convenient way to shift the blame as living standards continue to face unprecedented squeeze.
The big supermarkets don’t want a fight with our government. It’d be dangerous for them. With margins so thin any further tax or regulation on them could be catastrophic. But someone should speak up for them because they’re a miracle that we all owe a huge vote of thanks. Healey now owes them an apology
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