Ocado accused of ‘profiteering’ from the coronavirus crisis by hiking prices and axing discounts as demand for deliveries soars
Ocado has been accused of ‘profiteering’ from the coronavirus crisis by axing discounts and raising prices on thousands of goods.
The online supermarket removed 11,087 promotions and hiked the base price of 918 products between March 4 and April 8, according to industry data leaked to the Mail.
The move came as demand for its deliveries soared, with families avoiding going into shops amid fears over the spread of Covid-19.
Ocado removed 11,087 promotions and hiked the base price of 918 products between March 4 and April 8. Founder and chief exec Tim Steiner’s stake is worth some £480m
By contrast, other grocers have battled to keep prices down, with Asda cutting the cost of 649 goods and Aldi increasing the number of promotions.
Ocado disputed the findings yesterday, insisting its prices had gone down on average over the period, and admitted it had run fewer promotions so it could deliver to more homes.
But rivals and MPs demanded Government intervention, while one supermarket executive said: ‘When this is over there will be a reckoning. Customers will not forget or forgive profiteering during Covid-19, and rightly so.’
The leaked data shows Ocado raised base prices on 918 products, compared with 840 price rises at Tesco, Sainsbury’s, Asda, Morrisons, Aldi and Lidl combined.
The price of a 750g gammon joint rose from £3.75 to £5, a 16-pack of Nurofen Express rose from £3.30 to £3.80, and a two-litre bottle of Diet Coke rose from £1.95 to £2.
Ocado also cut the price of 450 items. By contrast, there was not a single price rise at Morrisons and it along with Asda, Tesco and Aldi introduced more price cuts than increases.
At the same time, Ocado slashed the number of items on promotion from 12,390 on March 4 to 1,303 on April 8.
This pushed the price of a nine-pack of Andrex from £4 to £5.25, while a 36-pack of Ariel 3-in-1 washing powder rose from £7 to £9.
While other supermarkets also removed promotions, the total cut at Ocado was more than four times higher than the next highest, Tesco.
Overall, the figures showed the total price of goods sold by Ocado rose by 7.7 per cent between March 4 and April 8.
Aldi and Lidl’s prices were flat, Asda’s fell by 0.1 per cent and Morrisons went up by 0.4 per cent. Tesco’s rose 2.7 per cent while Sainsbury’s were up 1.5 per cent. Ocado said it has started to reintroduce price promotions.
Its shares are up 50 per cent since the start of March, leaving the stake held by founder and chief executive Tim Steiner worth £480million. Success has also benefited savers who bought shares.
Anyone who invested £1,000 in Ocado in late 2017 would now have more than £6,700, But its pricing tactics caused outrage last night.
Labour MP Peter Kyle, a former member of the Commons business committee, said: ‘There are clear signs that rather than straining to contribute and do their bit at a time of crisis, a few companies are exploiting it to make a fast buck. Where profiteering exists, Government should act swiftly to protect consumers from exploitation.’
Retail analyst Richard Hyman said: ‘These numbers don’t look very good for Ocado. The supermarket sector has come out of the pandemic very well but this looks like an own goal. It’s damaging, without doubt.’
Ocado said: ‘Individual product prices have not gone up. On average, they are down since the beginning of March. We have run fewer promotions, but this was to protect the number of delivery slots we had for customers.
‘To make sure customers always get a fair deal, we have maintained our low-price promise, which means customers automatically get the difference back in vouchers if their basket is more expensive than a comparable basket at Tesco.com.’