Morrisons is feeling pretty chill about #Marmitegate, saying price rises will be “minimal”
The chairman of Morrisons supermarket has reassured shoppers that he will be minimising any price rises on groceries following the Brexit vote.
The price of a grocery basket became a source of controversy last year when Unilever demanded higher prices from supermarkets, but Tesco refused – leading to a stand-off that became known as #Marmitegate.
But speaking on the BBC Today Programme this morning, Morrisons' chairman Andrew Higginson said that any price rises in his stores will be "absolutely minimal".
Read more: The CEO with the Midas touch: City reactions to the Morrisons results
"No retailer will be wanting to pass on any cost increases, if they can," Higginson said.
Analysts have been debating whether retailers will be passing on the increased cost of goods to consumers. The full effects of sterling's fall will come in as and when retailers' hedging policies run out, but some have argued that the industry is so competitive that businesses will not be able to get shoppers to shoulder the burden.
And the supermarket sector is perhaps the most competitive of all, with German discounters consistently squeezing the margins of their more established peers.
Higginson was speaking on the day of Morrisons' final results for 2016. The supermarket's like-for-like sales were up 2.5 per cent, with underlying profit up 11.6 per cent to £337m, which was at the top end of the supermarket's guidance.
Paul Thomas, senior consultant at Retail Remedy, said:
The challenge from Tesco and the discounters will not let up, but while the leadership team continue to drive the supermarket forward and embed a can-do culture in the business, it is becoming increasingly resilient to attack and deflecting the pressure onto a weaker Asda.