M&S boss says supermarket price caps ‘completely preposterous’
The boss of M&S has dubbed government proposals to urge supermarkets to cap the prices of foods as “completely preposterous”.
Stuart Machin, chief executive of the retail giant, called on the government to cut red tape and taxes on grocers instead of pressuring supermarkets to cut prices.
The Treasury has reportedly been asking supermarkets to volunteer to slash prices on essential foods to protect the public from spiralling inflation caused by the Iran war.
But the proposals have been slammed by the industry, with one supermarket executive calling the intervention “completely mad”.
Announcing M&S’ financial results on Wednesday, Machin said: “I don’t think the government should be trying to run business. I think they should try and probably understand business better.
“My advice to government is to reduce some of the tax and regulatory burden and free us up in a very competitive market.”
Labour looks to ‘neo-Soviet policy’
The Treasury’s push for supermarkets to lower food prices comes as Rachel Reeves pledges to do more to protect Brits from the cost of living squeeze caused by the conflict in the Middle East.
But the price cap proposal was slammed by industry body the British Retail Consortium (BRC), which said this would “force retailers to sell goods at a loss”.
Helen Dickinson, the trade body’s chief executive, said the UK has Western Europe’s most affordable grocery prices.
“The challenge facing retailers is a combination of higher energy and commodity costs resulting from the Middle East conflict, and the soaring cost of the government’s domestic policies,” she said.
The Food and Drink Federation, which represents the UK’s 1,200 food manufacturers, said: “[The] government needs to focus on the root causes of rising food inflation, not the symptom.
“We don’t believe the answer is a price cap and it’s not clear to us how those proposals would work in practice.
The trade body called on the Treasury to focus on slashing “complex and costly” regulation to enable manufacturers to “keep a lid on food inflation”.
Former Asda chairman Lord Stuart Rose has branded the potential cap as “nonense”.
He told BBC Radio 4’s Today programme: “This smacks of state control. It is idiotic. It is dangerous and it will never work.”
Clive Black, an analyst at City broker Shore Capital, said the government “appears to be losing its mind in an orgy of neo-Soviet policy ideas”.
M&S calls for pro-business government
Pushing supermarkets to lower prices would deter international investment and could lead to “complex, costly, and distracting involvement” from the competition watchdog, Black said.
The policy appears to take its cue from SNP leader John Swinney’s pledge to cap food prices, which Shore Capital dubbed a “hair brained” proposal.
Machin called on the government to loosen taxes and red tape facing retailers and supermarkets.
Responding to speculation over Keir Starmer’s position as Prime Minister, Machin said: “It doesn’t matter who the Prime Minister is or who’s in government, we will work with them.
“But we do hope that we have a government that starts becoming pro business, pro growth, pro customer, pro working people, and we’ll be more than happy to help shape that.
A Treasury spokesperson said: “The chancellor has been clear we want to do more to help keep costs down for families, and will set out more detail in due course.”