daniel chigunwe
Supermarket shareholders are set for a bumper £1,2 billion payout, thanks to rising food prices.
As cash-strapped shoppers struggle to fill their trollies, investors in Tesco and Sainsbury’s will receive a billion pound bonanza.
Both supermarkets deny using food inflation as a cover to hike their prices and boost profits — a practice known as “greedflation” — yet analysis of company accounts by union Unite has revealed:
The stores’ 2022 operating profit margins hit an eight-year high.
In the last two years, Tesco has netted £2bn profit.
Sainsbury’s underlying gross profit surged 3 percent to £2,42bn in 2022/3 — as food inflation soared as high as 19,2 percent. Tesco’s £4,69 billion gross profit was just 2 percent lower than the £4,81 billion it recorded in 2021/2.
The bottom line is shareholders at both stores are now set for paydays totalling almost £1,2 billion. Net profits have slipped, but that’s largely down to costs like restructuring, not squeezed food margins.
Unite general-secretary Sharon Graham said: “The scandal of greedflation continues. People are paying the price at tills — and no supermarket PR offensive can cover that up.”
Both Tesco and Sainsbury’s said margins were down because they had borne the brunt of the inflation.
But accounts show the companies — which control 43 percent of the grocery market — still turned in underlying operating profits totalling £7,1 billion in 2022/23.
Sainsbury’s, whose boss Simon Roberts last year earned £4,9 million — 40 percent more than in the previous year, recorded gross profits of £2,42 billion, up 3 percent on 2021/22.
Unite said: “The numbers tell the real story. There’s no doubt in recent years supermarkets have made big profits at customers’ expense.
“There are question marks about whether absorbing increased food costs from suppliers are having a major impact on profits.”
Shareholders at Tesco can expect a £859 million payday — 17,5 percent more than the £73 million paid out in 2022, while Sainsbury’s investors will lap up a £319 million dividend windfall, up 34 percent on last year’s £238 million.
Together they add up to£1,2bn. Among the Tesco shareholders set to benefit is ex-Tory chairman Lord Michael Farmer, who has given millions to the party since 2010.
He backed Rishi Sunak’s leadership bid with £38 470 and the use of a private plane.
Tory peer Baroness Sheila Noakes is also listed as a shareholder of Sainsbury’s — but the biggest beneficiary will be Qatar, as the state holds 14,99 percent of the company.
Asda, the UK’s third biggest supermarket, has not yet published its accounts.
Labour MP Richard Burgon said: “The Government should put a cap on basic food products to tackle soaring food prices.”
The party’s Justin Madders also pointed to Tesco’s famous slogan, and said: “When it comes to squeezing as much as they can out of shoppers, big retailers still find Every Little Helps.”
Figures from the Office for National Statistics show a basket of 11 goods — including bread, olive oil and cheese — cost £35,86 in April, an annual leap of up £9,41.
Maddy Alexander-Grout, of money-saving community Mad About Money, said: “Supermarkets must do more to support people, such as giving away more to foodbanks.
“With some products going up by as much as 54 percent there is wiggle room to give more back to consumers.”
After tax, Tesco’s net profit did fall to £747 million — well down from last year’s £1,48 billion — but this was largely due to a revaluation of its property portfolio after interest rates shot up.
Sainsbury’s net profit dropped to £207 million because of factors such as “restructuring costs”.
City analysts expect Tesco to pay out 10,9p per share, and Sainsbury’s 13,1p.
Tesco said it had not passed on all additional costs to shoppers.
A spokesman added: “This analysis does not reflect significant investments in supporting customers and colleagues over the last year.
“We recognise the challenges customers face. It’s why we have worked in close partnership with suppliers to mitigate as much inflation as possible.”
Sainsbury’s added: “We are acutely aware of the pressures facing households. Our priority continues to be doing all we can to keep prices low.”
‘Inflation is a basic excuse’
Single mum Lucinda Bray fears many supermarkets are pushing up the prices of even the most basic items — and blaming inflation.
The marketing consultant (35) has relied on Universal Credit to top up her freelance income since she was made redundant. But she struggles to buy essentials for herself and son Harry, seven.
Lucinda said: “My shopping bill now is £75 a week. Two years ago, it was £40. I don’t understand how things can keep going up so much.
“Harry has always loved fishcakes which were £1 for eight. Now they are “on offer” for £2,25. — mirror.co.uk
Bongani Ndlovu