The Daily Telegraph

Why Waitrose’s claim to have held down its prices does not add up

- By Laura Onita

AS THE John Lewis Partnershi­p slumped to a first half loss of £99m, its top brass insisted it had not passed on its own rising costs to customers.

“Of all the electricit­y, gas and wages costs, none of them, zero, have been passed on to customers,” Bérangère Michel, its finance chief, said.

A closer look at the figures, however, shows the mutual, which also owns John Lewis department stores, has been less effective in keeping prices down at Waitrose at a time when cash-strapped shoppers are hunting for bargains.

The supermarke­t’s cost price inflation reached 8pc by the end of July and “has since continued to rise”, the mutual said yesterday, albeit this is still lower than the overall inflation rate of 12.4pc recorded in August by Kantar. All the “big four” chains were cheaper than Waitrose, according to The Grocer’s mystery shopping service last week.

Waitrose’s basket was considerab­ly more expensive at £73.13, coming in more than 20pc higher than Asda at £59.64. A total of 33 products – spanning both branded and private label – were tracked.

Meanwhile, prices for everyday staples have gone up by more than 30pc in some cases, according to data from Trolley.co.uk.

Two pints of Essential semi-skimmed milk costs £1.20, an increase of 33pc year-on-year, for instance. The price of a can of Heinz Baked Beans has jumped 50.4pc to £1.85.

Some industry observers believe that Waitrose has not acted quickly enough to lower prices, while rivals have been launching aggressive price-cutting campaigns. “Staying relatively quiet in the face of the cost of living crisis for much of the year has come at a cost,” Amira Freyer-elgendy, a retail analyst at Globaldata, says.

She expects more Waitrose shoppers to defect to the discounter­s or Tesco for everyday staples and household goods as a result, a trend that is already relatively pronounced.

Basket sizes were nearly a fifth smaller during the period compared to last year, Waitrose admitted, despite transactio­ns being up 14pc year on year.

James Bailey, Waitrose boss, said: “How and when we choose to pass food price inflation on to consumers, we’re exceptiona­lly careful [about] and we do an awful lot of work with suppliers.”

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