The Competition and Markets Authority (CMA) has launched an investigation into UK supermarkets following allegations that some have increased fuel prices and exploited market conditions.
It is also looking further into grocery price rises to ensure that weak competition among supermarkets is not adding to problems amid the cost-of-living crisis.
The competition watchdog said that while evidence shows the majority of price rises are due to global factors such as Russia’s invasion of Ukraine, there is also evidence to suggest weakening retail competition is also contributing.
It explained that the average 2022 supermarket pump prices are around 5p per litre more expensive than they would have been had their average percentage margins remained at 2019 levels.
Although supermarkets still tend to be the cheapest retail suppliers of fuel, the CMA said that its evidence showed at least one supermarket has significantly increased its internal forward-looking margin targets over the period.
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As a result, these supermarkets may have adjusted their pricing behaviour accordingly.
CMA chief executive Sarah Cardell said: “We are not satisfied that all the supermarkets have been sufficiently forthcoming with the evidence they have provided in our Road Fuel market study,” adding it wants “to get to the bottom of what is going on”.
The watchdog will now conduct formal interviews with the senior management teams of the UK’s leading supermarkets and issue its final report by 7 July.
“The rising cost of living is putting people and businesses under sustained financial pressure. The CMA is determined to do what it can to ensure competition helps contain these pressures as much as possible,” Cardell explained.
It will also ramp up its work in the grocery sector to understand whether any failure in competition is contributing to food price rises.
She added: “Grocery and food shopping are essential purchases. We recognise that global factors are behind many of the grocery price increases, and we have seen no evidence at this stage of specific competition problems.
“But, given ongoing concerns about high prices, we are stepping up our work in the grocery sector to help ensure competition is working well and people can exercise choice with confidence.”
