Cheaper Food, Bigger Profits
23 April 2024
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In the Media
In the Media
External Authors
Matthew Lesh writes for City AM
IEA Director of Public Policy and Communications Matthew Lesh has written for City AM defending Tesco from criticism after backlash to its large profits in 2023.
Matthew wrote:
“Our forefathers would have been absolutely stunned to see the variety of food on display at the average supermarket. The spice section has more flavours than would have been available for kings and queens in previous eras.
“Yet many do not appreciate this wonder of the modern world. Last week, Britain’s biggest retailer, Tesco, came under fire for doubling its pre-tax profit in a single year to £2.3bn. This was labelled outrageous profiteering, while one social media post called for the CEO and owners to be arrested.
“But this entirely misses the facts. Tesco’s profit margin was just 3.4 per cent last year and 1.4 per cent the year before, significantly below the average UK private company’s profit of around 9.8 per cent. A key reason for the higher profit is customers switching to Tesco, including customers treating themselves by purchasing higher-end products instead of eating out.
“Tesco claims to be cutting prices on 4,000 products by an average of 12 per cent. We should not fool ourselves into thinking that this is an altruistic act. Tesco is not a charity; it does not exist out of the goodness of its shareholders’ hearts.”
Read Matthew’s full piece here.
Matthew wrote:
“Our forefathers would have been absolutely stunned to see the variety of food on display at the average supermarket. The spice section has more flavours than would have been available for kings and queens in previous eras.
“Yet many do not appreciate this wonder of the modern world. Last week, Britain’s biggest retailer, Tesco, came under fire for doubling its pre-tax profit in a single year to £2.3bn. This was labelled outrageous profiteering, while one social media post called for the CEO and owners to be arrested.
“But this entirely misses the facts. Tesco’s profit margin was just 3.4 per cent last year and 1.4 per cent the year before, significantly below the average UK private company’s profit of around 9.8 per cent. A key reason for the higher profit is customers switching to Tesco, including customers treating themselves by purchasing higher-end products instead of eating out.
“Tesco claims to be cutting prices on 4,000 products by an average of 12 per cent. We should not fool ourselves into thinking that this is an altruistic act. Tesco is not a charity; it does not exist out of the goodness of its shareholders’ hearts.”
Read Matthew’s full piece here.
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