MP Liam Byrne is asking why the same product is sold for different prices (Image: Liam Byrne)
Supermarket bosses are under fire for charging higher prices in shops serving the UK’s poorer communities while customers in leafy suburbs pay less. An investigation by MPs found food can be up to 38% more expensive in smaller “local” or “express” stores, which typically serve lower-income customers, than in full-blown supermarkets owned by the same company, often in wealthier areas or accessible to customers with access to transport.
Supermarket bosses insisted the difference was a result of the higher costs of running smaller stores. But MPs claim they are unfairly forcing some shoppers to pay more than others. The House of Commons Business Committee, chaired by MP Liam Byrne, has launched an inquiry. The former Treasury Minister said: “It turns out that where you’ve got those smaller stores, which are often located in lower income communities, the prices we found were somewhere between 11 and 13% higher than if you had a car or you had transport that could get you to a superdtore. We just don’t think that’s right.
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“That could be hundreds of pounds extra on your bill.”
Research by the cross-party committee found a box of Neslte Cheerios costs ￡2.50 at a regular Sainsbury’s but the same size box was on sale for ￡3.45 at a Sainsbury’s Local store, a 38% increase. A packet of Shreddies was on sale for ￡3 at a Sainsbury’s supermarket, but the same product was found for sale for ￡3.35 at a Sainsbury’s Local.
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The MPs also found a 400g pack of Tesco British chicken breast mini fillets sold for ￡3.85 at a Tesco supermarket but ￡4.45 at a Tesco Express, while a 400g pack of Tesco lean beef was ￡5 at a Tesco supermarket but ￡5.50 at a Tesco Express.
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Mr Byrne presented the figures Dominic Morrey, Commercial Director for Fresh Food at Tesco, and Ed Anderson Director of Legal (Regulatory and Commercial) at Sainsbury’s, at a House of Commons session.
Mr Morrey said the different prices reflected the different costs of running the shops.
“We do charge a slightly different price in Express store formats. That’s ordinarily because those formats incur different costs.”
Smaller stores cost more to restock and may face higher rents or running costs relative to the size of the shop, he said.
Mr Anderson said: “There are very different operating costs involved in running a convenience chain and each part of our business has to stand on its own two feet. So some additional points to bear in mind is that often convenience stores will have longer hours.”
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He added: “They have a smaller product range, maybe around 4,000 products, whereas a supermarket would have 35,000 so they’re replenished more often which incurs extra costs.”
But Mr Byrne, who is MP for a Birmingham constituency, said: “My constituents have much poorer access to transport, much poorer access to cars, it’s much harder for them to get to a superstore, even in Birmingham than, it is the Express store.
“Why should they be paying 10% more than everybody else just because they live in a poor neighbourhood?”
MPs will be demanding tougher powers for watchdogs to end “rip off Britain”, he said.
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“We will be looking harder at what the supermarkets are up to, what airlines are up to, what companies like ticket master are up to, and making recommendations to government about how they strengthen the law but also crucially improve the enforcement against bad actors who are frankly fleeing consumers who need food.”
Mr Bryne added: "It simply can’t be right that families in poorer communities are penalised simply for the postcode they live in. How can it be right that the price of a box of cereal can rise by over a third just because someone shops in an ‘Express’ store on their estate instead of a superstore in the suburbs? This is a stealth tax on the poorest—levied not by government, but by some of our biggest retailers."
Sainsbury’s said it has become the first UK grocer to offer an “Aldi Price Match” scheme in convenience stores, which it says ensures prices are the same price, or cheaper, than Aldi.
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