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Daily Mirror
Daily Mirror
Business
Emma Munbodh

Ocado accused of 'profiteering' from coronavirus by hiking prices and axing discounts

Ocado has been accused of 'profiteering' from the coronavirus crisis after raising prices on 918 products and axing promotions on hundreds more lines.

The online supermarket, which banned sales of bottled water and stopped taking online orders from new customers last month, has come under fire for cashing in on the pandemic.

A leaked report, seen by the Mail, shows the premium grocer removed 11,087 promotions and hiked the base price of 918 products between March 4 and April 8, at the height of the coronavirus emergency.

During this period, every supermarket in the UK reported an influx of panic-buyers with many struggling at the hands of extreme demand.

Over the same month, Asda cut the cost of 649 goods and Aldi increased the number of promotions in stores.

Ocado disputed the findings, stating its prices had gone down on average over the period. It said fewer promotions were run to allow it to deliver to more homes.

But rivals and MPs are now calling for government intervention.

A nine-pack of Andrex tissues rose from £4 to £5.25 (AFP via Getty Images)

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 prices on 450 lines. By contrast, there was not a single price rise at Morrisons who, 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% between March 4 and April 8.

Aldi and Lidl's prices were flat, Asda's fell by 0.1% and Morrisons went up by 0.4%. Tesco's rose 2.7% while Sainsbury's were up 1.5%.

Ocado said it has started to reintroduce price promotions.

A 16-pack of Nurofen Express rose from £3.30 to £3.80 (Reuters)

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 promotions were cut to help it cope with a surge in online orders.

"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," a statement said.

"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."

Latest Government figures show that overall, supermarket prices on 'essential' items have risen by an eye-watering 8% in the past month.

The greatest price increase has been on pet food, which has risen by 8.4% over the past month, followed by rice which increased by 5.8%.

Nappies have risen by 3.4% in the past three weeks, while antibacterial surface wipes and hand wash went up by 3.3% and 2.8% respectively.

Some product prices dropped during the same period - pasta sauces saw the biggest cost decrease by dropping 4.5%.

Baby food prices fell by 4.1% while dried pasta prices were slashed by 3.3%.

The ONS added that food prices in general had been relatively stable between March 16 when lockdown began until April 12.

This could be partly due to the warning issued by the competitions watchdog that it would fine retailers who used the pandemic to inflate prices.

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