Following a two-month inquiry the CMA has found that competition issues are not driving food price inflation, with costs rising faster than revenues.
Operating profits in the retail grocery sector fell by 41.5% in 2022/23, with shoppers looking around to find the best deal to avoid paying inflated prices.
However, the CMA has told supermarkets in the UK to make their pricing more consistent in order to avoid confusion when consumers compare prices.
The new report highlighted concerns over the consistency, transparency and legibility of in-store pricing, while stating that promotion prices were often unclear.
As a result, the body is calling on the Government to push through legislation that supports consumers when comparing products in-store.
In addition, the body has asked retailers to provide consistent unit pricing information on products so that consumers can make like-for-like comparisons.
“With so many people struggling to feed their families, it’s vital that we do everything we can to make sure people find the best prices easily,” said CMA chief executive Sarah Cardell in response to the report.
Supermarkets face increasing regulatory pressure
Gareth Mills, partner at law firm Charles Russell Speechlys, warned that supermarkets should expect increased “levels of scrutiny” as politicians seek to protect consumers from rising food prices.
“The current cost of living crisis has led to competition regulation and politics becoming increasingly intertwined, with the CMA’s investigatory findings and subsequent ministerial announcements to the press threatening greater regulation or oversight becoming almost weekly occurrences,” Mills explained.
“As increasing prices continue to be felt by the public across the country, the role of regulators in ensuring that competition is acting in the interest of consumers is likely to become more prevalent over the coming months.”
In other news, the number of food and drink businesses forced into administration during the first half of 2023 was up 110% compared with the same period a year.