# Britain’s Ocado follows rivals in cutting some prices
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2023-06-29
Category: Uncategorized
Category URL: https://financedigest.com/category/uncategorized
Meta Title: Ocado Retail Joins Trend of Price Cuts Amid Rising Food
Meta Description: Ocado Retail follows rivals in slashing prices of essentials, offering relief to consumers amidst rising food costs and economic strain.
URL: https://financedigest.com/britains-ocado-follows-rivals-in-cutting-some-priceshtml

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By James Davey

LONDON (Reuters) – British online supermarket Ocado Retail has followed rivals by cutting prices of some essential items, adding to hopes a surge in food inflation will moderate this year and provide relief to consumers battered by a cost of living crisis.

Stubbornly high inflation has become a major political issue in Britain as it outstrips pay growth for almost all workers, while higher taxes and rising interest rates are also straining household budgets.

UK food and drink inflation was 18.3% in May, according to the most recent official data, and 14.6% in June, according to [industry data](https://www.financedigest.com/shock-data-logger-market-2021-outlook-current-and-future-industry-landscape-analysis-2029.html "Shock Data Logger Market 2021 Outlook, Current and Future Industry Landscape Analysis 2029").

Signs it could abate or even reverse in the coming months are being [closely watched](https://www.financedigest.com/finland-watching-its-waters-closely-after-gas-pipeline-blasts-pm-says.html "Finland watching its waters closely after gas pipeline blasts, PM says") by the Bank of England, lawmakers and consumers.

[Ocado Retail](https://www.financedigest.com/ocado-retail-cuts-outlook-as-britons-tighten-belts.html "Ocado Retail cuts outlook as Britons tighten belts"), a joint venture between Ocado Group and Marks & Spencer, said on Thursday it had reduced prices on over 100 products, including milk, Greek yoghurt and seeded rolls, by an average of 10%.

It has cut the [price of four pints](https://www.financedigest.com/mapping-the-price-of-a-pint.html "Mapping the Price of a Pint") of Ocado own-brand milk by 10 pence to 1.45 pounds ($1.84).

All of Britain’s major grocers, including market leader Tesco and No. 2 Sainsbury’s, have [cut prices of some staple products](https://www.financedigest.com/british-supermarket-waitrose-cuts-prices-on-200-products.html "British supermarket Waitrose cuts prices on 200 products") in recent weeks.

Tesco [said last month it believed](https://www.financedigest.com/naturgys-profit-rises-on-lng-gains-soothing-shareholders-by-pietro-lombardi-madrid-reuters-spanish-power-utility-naturgy-reported-on-monday-an-88-jump-in-profit-for-the-first-six-months-of.html "Naturgy’s profit rises on LNG gains, soothing shareholders By Pietro Lombardi MADRID (Reuters) – Spanish power utility Naturgy reported on Monday an 88% jump in profit for the first six months of the year, boosted by strong earnings at its liquefied natural gas (LNG) business, which could help it to win over restive investors. Earlier this month, the company said it would increase its dividend floor through 2025 while trimming expected investment, as it sought to make rewarding shareholders a priority. Pleasing them has become a focus as Naturgy considers changes that could reshape the company and after arguments over the potential appointment of a chief executive. Naturgy’s first-half net profit jumped to 1.05 billion euros (.16 billion), boosted by its liquefied natural gas (LNG) business. Shares were down 0.2% in mid-morning trading, bucking deeper declines, in particular for Spain’s blue-chip banks and utilities after a general election on Sunday produced no clear winner. Renta 4 Banco analyst Angel Perez Llamazares said Naturgy performed better than expected, adding “cash flows also beat our expectation,” and debt fell more than expected. After natural gas prices hit record levels last year, Naturgy said a fall in procurement costs this year and hedging gains had boosed profits. In the first half of the year, the company “exceeded the objectives of operating efficiency, cash generation, investment materialisation and debt reduction,” Executive Chairman and CEO Francisco Reynes said. After rival Iberdrola named a separate CEO last year, Naturgy is the only large energy company in Spain to combine the roles of executive chairman and CEO. Earlier this month, the company raised the dividend floor to 1.40 euros a share, from 1.20 euros. Operating profit (earnings before interest, tax, depreciation and amortisation) is expected to reach 5.1 billion euros, compared with a previous guidance of 4.8 billion euros. It said it was targeting net profit of 1.8 billion euros in 2025. Naturgy also relaunched its plan to split regulated infrastructure operations and liberalised energy businesses into two listed companies. The project had been suspended after the Ukraine war disrupted energy markets and analysts are still sceptical. “We believe it is unlikely that Naturgy will be able to implement its asset split in the short term and it is also unlikely that a big change in the shareholding of the company would occur,” said RBC analyst Fernando Garcia. ( = 0.8986 euros) (Reporting by Pietro Lombardi, editing by Inti Landauro and Barbara Lewis)") food inflation had peaked.

The supermarkets have been accused by some trade unions and politicians of profiteering by being too slow in passing on to [consumers falls in global commodity prices](https://www.financedigest.com/u-s-inflation-outlook-brightens-as-import-prices-fall-consumer-sentiment-rises.html "U.S. inflation outlook brightens as import prices fall, consumer sentiment rises") – a charge they reject.

Governments [across Europe](https://www.financedigest.com/white-bullets-piracy-demonetising-programmes-drastically-reduce-ad-revenues-to-piracy-websites-across-europe-analysis-finds.html "White Bullet’s piracy demonetising programmes drastically reduce ad revenues to piracy websites across Europe, analysis finds") are struggling with high inflation. Last month, the French government secured a pledge from 75 top food companies to [cut prices on hundreds of products](https://www.financedigest.com/british-supermarket-morrisons-cuts-prices-of-nearly-50-products.html "British supermarket Morrisons cuts prices of nearly 50 products"), while Hungary’s government has imposed mandatory price cuts.

While the UK government has raised concerns about the surge in food prices, it says it is not [considering price caps](https://www.financedigest.com/eu-countries-consider-lower-gas-price-cap-documents.html "EU countries consider lower gas price cap – documents").

Britain’s [competition watchdog](https://www.financedigest.com/uk-competition-watchdog-has-music-streaming-in-its-sights.html "UK competition watchdog has music streaming in its sights") is examining grocery prices but has said that so far it has not seen evidence pointing to specific concerns.

Shares in Ocado Group surged as much as 47% last Thursday after a [Times newspaper report](https://www.financedigest.com/hmrc-annual-report-and-accounts-2020-21-debt-at-an-all-time-high.html "HMRC Annual Report and Accounts 2020/21 – Debt at an All-time High") of possible takeover interest from Amazon. The stock has fallen sharply since.

($1 = 0.7870 pounds)

(Reporting by James Davey; Editing by Mark Potter)


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