SUPERMARKETS

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Research by the Royal Bank of Scotland claims that the cost of groceries is rising nearly three times as fast in Britain as the rest of Europe and that supermarkets are using their monopoly position to push up food prices. The report found tea and coffee prices soared 10.2% over 12 months, compared with only 1% on the Continent and vegetable prices also jumped 10.2%, whereas they rose 3.1% across the Channel. Non-alcoholic drinks went up 6%, compared with 2% in the rest of Europe. Consumers pay 5.6% more to fill their trolley than they did a year ago which compares with an increase of only 1.9% in the Eurozone.

The report's authors said rising energy prices are thought to have pushed up the cost of a broad range of products, including food. Tesco controls 31.2% of the British grocery market, while Asda has 16.9%. The report's authors, economists Geoffrey Dicks and Ross Walker, said rising energy prices are thought to have pushed up the cost of a broad range of products, including food. Poor harvests have also contributed in recent months.

Matt Hardman, of the Forum of Private Business, said, "The supermarkets have been able to convince consumers that shopping with them is cheaper than anywhere else, but in reality if you do your homework you can get a better deal elsewhere. We are concerned by their power to inflate prices, drive their competitors out of business and grab market share." Tesco hit back, insisting it offered shoppers a good deal. It said prices of some fresh products have been rising because of forces beyond the company's control. (Source: Daily Mail, Apr/07)

Product availability levels in the UK's top six supermarkets have plummeted over the past six months, according to the trade magazine The Grocer. It shows that some major stores around the country are racking up nearly twice the number of 'out of stock' products compared with the first half of the year and millions of customers have complained that they waste valuable time trekking along store aisles seeking to complete their shopping lists only to find that shelves are empty. The Grocer said, "Supermarkets need to start decking their halls with food, and fast. It seems retailers have become so consumed with environmental issues such as reducing waste, cutting plastic bag usage, and recycling, that they have taken their eye off the availability ball and allowed stock levels to plummet." (Source: Mail on Sunday, Dec/06)

Summer is almost here and to celebrate, many supermarkets are giving away free barbecues to everyone who is able to go and collect them. You can get a free BBQ from any of the following stores:

ASDA Morrisons Costco Kwik Save Somerfield Aldi Sainsbury Tesco Iceland Netto

(Click on picture for larger image)

All BBQs come with a higher shelf which can be used for keeping things warm!

PLEASE NOTE: Some stores may charge a £1 administration fee.

Customers shopping at the big-name retailers are being charged 60 - 70% more for organic meat, vegetables and other foods than for the ordinary equivalents. In some cases, the difference is far greater, eg; organic potatoes can cost 285% more than the non-organic kind. Due to BSE and the GM food scare, demand has risen for produce farmed organically, without chemical pesticides and fertilisers. Organic production costs are a third higher, but the average price difference on the shelves is often double that.

Dr Anna Ross, senior lecturer in economics at the University of the West of England, researched comparative prices for a typical shopping basket that included fruit and vegetables, meat, poultry and a range of other groceries. She found that the organic basket cost 71% more at Tesco, 65% more at Sainsbury's, 62% at Waitrose, and 60% at Somerfield.

The supermarkets have suggested that prices will fall as the market becomes established. And when Asda announced that it would undercut its rivals, it prompted fears of an organic price war – but there are few signs of it happening so far. "When people suggest that the price will fall as demand increases they are missing the point," insists Dr Ross, who believes that, in line with orthodox economics, the opposite is true. "Supermarkets are able to exploit huge consumer demand with excessive price hikes on organic food."

The Government promised to raise subsidies for farmers who want to go organic from £1m to £24m, as Britain does not grow enough to meet demand. In the meantime, supermarkets are looking abroad for their supplies. Somerfield imports up to 85% of its organic produce, which increases the costs. "We are also dealing with far fewer suppliers with the result that we have limited choice in who we buy from, with far less competition," it said. It has been suggested that while demand for organics is growing, the market for ordinary produce is over-supplied, so it's really a case of conventional being so cheap.

Plans for a watchdog to deal with the rising tide of complaints about supermarkets bullying suppliers are being weighed up by the Government. The scheme will be given impetus by the publication of a report by the Office of Fair Trading into the code of practice on the relationship between supermarkets and their suppliers. The possibility of an independent watchdog, still in the early stages of discussion, reflects the concern of Tony Blair, who condemned the supermarket giants' hold on suppliers as an 'armlock'. The Department for Environment, Food and Rural Affairs confirmed that the Government has been influenced by the number of complaints and said that a watchdog is under consideration.

In the most recent example of bullying, Sainsbury tried to impose new terms on 1,900 suppliers that would mean they would have to wait up to 49 days, instead of 21, before being paid. Suppliers are also obliged to contribute to supermarkets' marketing costs, pay for damage to products after they have been delivered and compensate retailers for lower than expected sales. The calls for action could increase after the results of the OFT investigation are made public. The OFT ordered the investigation after a probe found a 'widespread belief' that the code of conduct introduced in 2002 was being violated. (Source: This is Money)

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