Private equity-owned supermarkets feel heat

BRITAIN’S private equitybacked supermarkets are under increasing pressure to keep their prices in check this year – denting profits for their new owners in the process.

Asda and Morrisons recently fell into the hands of buyout barons in debt-fuelled deals.

The takeovers sparked fears that prices may rise as the new owners seek to maximise returns. But as a cost of living crisis looms, German discounters Aldi and Lidl have pledged to be the UK’s cheapest grocer, setting the scene for a brutal price war.

Larger rivals Tesco and Sainsbury’s have also vowed to prioritise affordability. Shore Capital analyst Clive Black said it would be ‘a strange strategy’ for the new owners to hike prices. But he added: ‘Private equity are profit maximisers, so it will be interesting to see how that pans out.’