23 June,2023
In a recent interview with City A.M., Justin King, the former CEO of Sainsbury’s, vehemently rejected the allegations of British supermarkets engaging in profiteering amid the ongoing cost of living crisis. King urged the government and regulators to prioritize assisting those in need instead of considering unnecessary interference in the markets.
Dismissing the notion that supermarkets are taking advantage of the current circumstances, King stated, “This idea that [supermarkets] are somehow profiteering in these circumstances.. it doesn’t even pass a basic smell test.” He emphasized that the profit margins of both Tesco and Sainsbury’s have witnessed a decline, as reflected in their most recent financial reports.
Regarding the ongoing concerns, Chancellor Jeremy Hunt recently met with supermarket representatives, and the Competition and Markets Authority (CMA) has initiated an investigation into the impact of competition on grocery prices. However, King advised the CMA to focus on factual analysis rather than succumbing to political rhetoric.
Although grocery price inflation has slightly eased, standing at 16.5% for the four weeks ending June 11, King pointed out that many supermarkets have already reduced prices on key items. He also dismissed the government’s proposal of voluntary price limits for basic food items, which supermarkets rejected, deeming it a “truly silly idea.”
“The government should not try to interfere in markets,” King asserted. “Helping those in most need is what the government should be doing.”
King, who has transitioned to the technology sector, is currently a major investor in and advisor to the food delivery app Snappy Shopper. The app aims to compete with established players such as Deliveroo and Gorillas, experiencing a notable 50% year-on-year growth and successfully completing 5.5 million orders in the past year.
While Snappy Shopper continues its organic growth strategy, King highlighted the focus on expanding in Scotland and the north of England, with plans to extend the business’s presence beyond London. Reflecting on the growth rate, King remarked, “We’re building the business for the long term, and we think 50% is a good rate of growth for now.”
As the debate surrounding supermarket pricing and government intervention continues, the insights of industry veterans like Justin King shed light on the complexities of the market and the importance of evidence-based decision-making.