Asda ceo Andy Bond has warned that supermarkets that attempt to squeeze profits from their customers during the credit crunch will find themselves in deep water when the economy recovers.
Responding to a Guardian post asking ‘ Who wins when the supermarkets go to war’, Bond wrote: “Those companies that choose to make a quick buck at their customers’ expense will live to regret it when the economy picks up.”
Customers, suppliers and the economy profit when supermarkets enter into price wars, insisted Bond - although some people believe supermarkets are using inflation as an excuse to push up food prices, rather than attempting to keep them down. “There is no excuse in my mind for any retailer to take advantage of the difficult economy to make even more profit,” he wrote. “When I talk to our customers they’re genuinely concerned about making ends meet.”
Shopping patterns are changing, he noted, with a rise in sales of premium foods as people choose to eat in at the weekend rather than go out, and an increasing number of shoppers switching to economy supermarket brands.
Bond added that not only has food price inflation finally peaked, but shoppers will soon start to see grocery prices fall again. “We are already beginning to see the cost of raw materials like wheat ease off and oil prices fall,” he wrote.
“Last week we announced price cuts on more than 5,000 products, including 300 items in our Smart Price economy range. These are not short-term price promotions, they are real and long-term price cuts… These are funded by Asda, not paid for by our suppliers or farmers. That’s a welcome relief for shoppers and good news for the chancellor and the struggling UK economy.
“But I believe as commodity prices continue to come down, retail prices should come down too. And while supermarkets may not be able to solve the country’s economic problems, we can do our bit to help shoppers save money during these tough times.”
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