Tesco’s profits fell due to property values, rising interest rates and admin expenses. Not because of “absorbing” increased food costs.
Sainsbury’s gross profit “before non-underlying items” actually increased last year. It was £2.42 billion in 2022/3, 3% higher than £2.36 billion in 2021/2.
A deep dive into supermarkets’ accounts by Unite’s team of forensic accountants rips apart claims that food prices have squeezed Tesco’s and Sainsbury’s latest profits Commentators defending corporate interests have used Tesco’s fall in profit in 2022 as proof that the Supermarkets are not engaged in “rampant profiteering” in the midst of the cost of living crisis. Sainsbury’s boss has even claimed “We are not profiting from high prices.”
But Unite can reveal that Tesco’s profits fell mainly due to a revaluation of its property portfolio after interest rates shot up last year, as well as rising “administration expenses”. Not because of “absorbing” increased food costs from its suppliers.
Sainsbury’s gross profit “before non-underlying items” actually increased last year. It was £2.42 billion in 2022/3, 3% higher than £2.36 billion in 2021/2.
Even as their customers struggle with high food prices, the two biggest supermarkets, Tesco and J Sainsbury, are paying out a massive £1.2 billion to their shareholders this year. Tesco plans to pay £859 million in dividends in 2023; Sainsbury £319 million. These are their highest “common” dividends since 2015.
Unite general secretary Sharon Graham said:
“The scandal of Greedflation continues. Ordinary people are paying the price at the tills and no PR offensive by the supermarket giants can cover that up.
“Our team of forensic accountants has examined their claims that mega profits have dipped as they “absorb” increased food prices. But a deep dive into Tesco’s and Sainsbury’s accounts finds no sign that this is the case.
“Instead, Tesco’s continue to pay out big dividends and any fall in its still high profits occurred mainly due to a revaluation of its property portfolio. Whilst Sainsbury’s gross profit actually increased last year.
“Reckless profiteering is one of the scandals of our age and it’s time our politicians took action to protect the public.”
