John Healey, the new Chancellor under Andy Burnham, has warned supermarkets that he will be 'watching closely' for price gouging as the conflict in Iran continues. However, critics argue that this approach is misguided, as there is no significant evidence of profiteering, and UK food prices remain among the cheapest in the developed world.
Healey's Warning to Supermarkets
In a piece for the Telegraph, Healey stated: “We’ll be watching closely for any suggestions that customers are being taken for a ride at the pump or the till.” He acknowledged that companies have worked positively with the Government and that there has been “no significant evidence of so-called price gouging,” but he wanted to reassure the public that regulators have the power to clamp down if it occurs.
UK Food Prices: A Success Story
Despite challenges like Brexit, Covid, and the Russia-Ukraine war, UK food prices have remained below the EU average, according to the IGD. In 2024, food prices were “more like Eastern Europe than Western Europe,” with shopping baskets cheaper than in Spain, Portugal, Italy, Germany, and France. Only Slovakia, Poland, Romania, and Bulgaria were cheaper.
The IGD notes that supermarkets and their suppliers are under “severe pressure” from keeping prices low, which restricts their ability to reward workers and invest in future production.
Thin Margins, Not Profiteering
Supermarkets operate on razor-thin margins. Tesco made just 2.4% net profit on £82bn revenue, while Asda lost £989m on £25.9bn revenue. Aldi, the UK's cheapest supermarket, made only 2.4% profit margins in 2025. These figures do not indicate profiteering but rather intense competition that benefits consumers.
Most major supermarkets—Sainsbury's, Tesco, Asda, and Morrisons—remain British-owned success stories, employing thousands and contributing significant tax revenues. The sector exemplifies free-market competition driving down prices, unlike other industries with less competition.
Call to Back British Business
Instead of warning shots, critics argue Healey should support British businesses and families, especially as the economy faces pressure from the Middle East conflict. The focus should be on fostering business confidence rather than undermining it.
