By Muvija M
LONDON (Reuters) - Britain's competition regulator told supermarkets on Tuesday it was looking at their earnings to identify which supply chains it needed to examine more closely as part of efforts to tackle food price inflation.
Food prices are up more than 19% over the last year, after the most sustained inflation since the 1970s, adding strain to household budgets stretched by high energy bills and other price increases.
The Competition and Markets Authority, which promised to step up its work looking into grocery prices two weeks ago, repeated on Tuesday that it had not seen any evidence yet of specific problems.
"We are looking at trends in retailer profitability, with a particular focus on the major supermarkets and the discounters who, together, account for over 80% of overall groceries spending," the watchdog said in an open letter to the groceries sector.
"We will also examine product-level inflation indices and how these relate to trends in input costs."
A media report on Saturday that the government was looking at plans to ask retailers to cap the prices of basic food items drew criticism from industry body BRC, which said they would not make any difference.
Official figures have shown that high inflation did not boost company profits in 2022, with the exception of oil and gas producers.
The CMA said it planned to publish an update on its work in late July, when it would also publish a report on its work on unit pricing, which shows how much a product costs by weight or volume and helps people to identify the best value for money.
Major supermarkets including as Tesco (OTC:TSCDY) and Sainsbury's have announced price cuts on some food items in recent weeks.