A government plan to bring in voluntary price caps on food has been labeled “harebrained” by one of Britain’s most experienced retailers.
(Bloomberg) — A government plan to bring in voluntary price caps on food has been labeled “harebrained” by one of Britain’s most experienced retailers.
Archie Norman, chairman of Marks & Spencer Group Plc, also criticized the UK’s Competition and Markets Authority, which is investigating the price of groceries.
“I don’t think the CMA have got anything right for about three decades,” said Norman during an interview with Bloomberg Radio. “We have seven major competitors in the supermarket industry all trying to kill each other, and they’re going to carry on trying to kill each other and it’s highly competitive.”
Norman said supermarkets could make more money by cutting prices and gaining new customers than by trying to push up margins.
“Price caps don’t work,” he added. “I’ve heard some harebrained ideas come out of the political world in my time, and that’s one of them.”
Read More: UK Government Looks to Get Supermarkets to Cap Food Prices
Norman said the idea was reminiscent of 1970s Britain when price controls were reintroduced by then-Prime Minister Edward Heath. “Essential foods are coming down in price. The market is taking them down. They’re coming down in price as we speak.”
Grocery price inflation has proved sticky in the UK with Office for National Statistics data last month putting it at 19%, close to the highest rate in more than 45 years.
Supermarkets have announced some price drops on key items such as milk, bread and butter. Last month Tesco Plc extended its cuts to include pasta and cooking oils while J Sainsbury Plc has lowered prices on more than 40 dairy products including cheese, yogurt and cream.
Read More: Waitrose Cuts Price of 200 Products Even as Inflation Persists
Prime Minister Rishi Sunak has launched a series of reviews into the fairness of food supply chains and the UK antitrust watchdog is investigating the price of groceries. Ministers said last month they were seeking a voluntary deal with supermarkets to weigh down on prices. “The government has not and will not consider imposing price caps,” a spokesperson said in an emailed response to Norman’s comments.
A representative for the CMA declined to comment.
Norman’s comments come after Stuart Rose, chair of Asda, warned the government against “clumsy” interventions that could lead to unintended consequences. “Let the shopkeepers do what they do well, shop keep,” Rose said last month.
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