Asda’s gasoline margin targets have been thrice the 2019 degree by 2023, MPs advised

Jul 19, 2023 at 5:06 PM

sda’s pence per litre gasoline margin targets have been thrice their 2019 degree by 2023, and the retailer intentionally handed on reductions to retail costs extra slowly in areas the place they’d no competitors, the competitors watchdog has advised MPs.

Competition and Markets Authority (CMA) director of markets Dan Turnbull advised the Business and Trade Committee that Asda repeatedly advised it over the course of its market research that it had not modified its gasoline pricing technique as a result of it had persistently maintained the technique of being the bottom price supplier in any specific space.

However, Mr Turnbull mentioned: “On that particular point we didn’t find any evidence that that had changed. But what we did find were two very significant changes to Asda’s pricing approach: the first of those was around their internal margin targets.

Asda told us that they saw an opportunity as the wholesale price fell to pass through reductions in the retail price more slowly than they previously would have done

“So we found that between 2021 and 2023 they significantly increased their internal fuel margin targets on a pence per litre basis, and indeed by 2023 those pence per litre targets were three times what they’d been in 2019.

“The second of these areas was the decision that Asda took during 2022 to deliberately feather prices on fuel as they came down from the peak.

“Asda told us that they saw an opportunity as the wholesale price fell to pass through reductions in the retail price more slowly than they previously would have done.