Talking Retail quotes Jamie Cartwright on the CMA's report on grocery price inflation
The Competition and Markets Authority (CMA) has accused some suppliers of branded grocery products of contributing to the recent surge in inflation in the supermarket sector by raising their prices by more than their costs had increased.
The CMA claimed 75% of manufacturers in certain product categories have raised prices faster than costs.
Branded products have always and continue to command a premium; consumers broadly understand that. For manufacturers, the balance is to maintain and increase profit but to retain customer loyalty. Pushed too far on price, where their consumer budgets are tighter and there are increasingly good own label alternatives, branded products’ market share face a real challenge. If that market share is falling, chasing profit shortfall by price increases on individual products may provide only a short term reset, as more and more consumers adopt the own brand products and like them.