Veteran retail boss Stuart Rose has warned the Government of “unintended consequences” around encouraging supermarkets to impose price caps on food staples to cut the cost of living.
Asda chairman Lord Rose, who also ran Marks and Spencer and chaired Ocado, said “you can’t interfere in the markets” and warned of the “unintended consequences” of “relatively clumsy things”.
The Government is facing a backlash from retailers over its plans to encourage supermarkets to impose voluntary price caps on food staples to help with the cost of living.
Downing Street is understood to be drawing up proposals to advocate for charging the lowest possible amount for some basic products like bread and milk.
Speaking on a call to reporters, Mr Rose said: “My view on this is quite simple. I’ve been involved in retail for 50 years, and there’s been all sorts of schemes being followed by all sorts of governments over time about what they think we should be doing to control the market.
“You can’t interfere in the markets, the markets will control themselves. We are a very efficient industry, not just in Asda, across the retail piece. We have kept the price of electronics and clothing and food in real terms down to levels that are unprecedented in terms of our ability to be efficient.
“So, you know, I think we do a very, very good job for consumers, and if the Government wants to start doing – in inverted commas – ‘relatively clumsy things’, they need to be careful about the unintended consequences of what they want to do. Let the shopkeepers do what they do well: shop keep.”
The British Retail Consortium (BRC) has said the measures would not make a “jot of difference” to pricing and warned they could thwart efforts to cut inflation.
The opt-in scheme, modelled on a similar agreement in France, would allow supermarkets to select which items they would cap, the Sunday Telegraph reported.
It was ridiculed by opposition MPs on Sunday who compared the plans to pricing controls introduced by Conservative prime minister Edward Heath in the 1970s.
A No 10 source said the proposals are at “drawing board stage” but stressed they would only be implemented at retailers’ discretion.
The optional aspect of the scheme has led critics to question whether it will have any effect on costs, while right-wing think tank the Institute of Economic Affairs (IEA) branded it a “pointless gimmick”.
It comes after Chancellor Jeremy Hunt backed interest rate hikes – even if they risk plunging the UK into recession – in order to combat soaring inflation.
Although down from 10.1% in March, the Consumer Prices Index of inflation remained stubbornly high at 8.7% in April, while food is still alarmingly expensive.