Motorists should not expect to see a return of supermarkets using cheap fuel to lure in shoppers, an industry source has told Sky News.
They spoke out after weeks of criticism from motoring groups and fuel price campaigners that supermarket petrol stations are failing to reflect plunging wholesale fuel prices.
Data supplied by the AA and RAC has consistently shown costs for unleaded and diesel becoming cheaper at many independent forecourts, with supermarket fuel at around average or just below average levels.
They argue the sector should be leading the way on fuel prices due to its bulk-buying power, after Brent crude oil nudged levels not seen since January on Tuesday.
The pair are pushing their case at a time when the industry regulator is investigating British fuel price behaviour.
RAC fuel spokesman, Simon Williams, said: “There is yet more pressure on the biggest fuel retailers today to pass on savings to drivers as the price of oil has dipped below $80 for the first time since the start of the year causing the wholesale cost of petrol to tumble to 105p a litre and diesel to 119p.
“If a cut of at least 10p a litre doesn’t come soon it will be yet more evidence of ‘rocket and feather’ pricing for the Competition and Markets Authority (CMA) to take note of.
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“The disparity between average pump prices at 158p for petrol and 182p for diesel and their wholesale equivalents is truly shocking.
“Even taking account of major retailers’ buying cycles, we can see no justification for them not cutting their prices significantly.”
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Supermarkets have historically charged around 3.5p per litre less at the pump than the UK average.
Fuel was effectively subsidised as part of the big four chains’ efforts to grow their respective grocery market shares.
But that changed last year when COVID pandemic restrictions ended and oil prices shot up – pushed even higher this year by the effects of the war in Ukraine.
Image: The market, particularly for diesel, has been distorted by the war in Ukraine and the West’s sanctions on Russia
The source suggested that the increased costs that supermarkets were grappling, largely linked to the war, meant they were now more focused on delivering value in areas other than fuel to keep essentials down in price as much as possible.
They said that, as a result, fuel was no longer a loss leader and pre-pandemic pricing behaviour was “gone”.
Oil prices have generally fallen back since July though diesel costs have remained elevated, relative to unleaded, because of Europe and the UK’s past reliance on imports from Russia.
The CMA’s investigation into British fuel prices, started during the summer, has been widened after it found evidence of so-called ‘rocket and feather pricing’ – when prices are quick to go up but slow to ease.
Andrew Opie, director of food & sustainability at the British Retail Consortium which represents supermarkets, told Sky News last month: “Retailers understand the cost pressures facing motorists and will do everything they can to continue to offer the best value-for-money across their forecourts, passing on cost reductions as they feed through the supply chain.”
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said of the recent oil price falls: “The shivers of apprehension about the prospects for the world economy pushed oil prices to their lowest point in a year, with the benchmark Brent Crude dropping to $79 a barrel.
“Prices have edged up very slightly on the latest zero-COVID easing moves from Beijing, but worries about weakening global demand as recessions are predicted, are still set to limit gains.
Marks & Spencer (M&S) has ordered hundreds of agency workers at its main distribution centre to stay at home as it grapples with the unfolding impact of a cyberattack on Britain’s best-known retailer.
Sky News has learnt that roughly 200 people who had been due to undertake shift work at M&S’s vast Castle Donington clothing and homewares logistics centre in the East Midlands have been told not to come in amid the escalating crisis.
Agency staff make up about 20% of Castle Donington’s workforce, according to a source close to M&S.
The retailer’s own employees who work at the site have been told to come in as usual, the source added.
“There is work for them to do,” they said.
M&S disclosed last week that it was suspending online orders as a result of the cyberattack, but has provided few other details about the nature and extent of the incident.
In its latest update to investors, the company said on Friday that its product range was “available to browse online, and our stores remain open and ready to welcome and serve customers”.
“We continue to manage the incident proactively and the M&S team – supported by leading experts – is working extremely hard to restore online operations and continue to serve customers well,” it added.
It was unclear on Monday how long the disruption to M&S’s e-commerce operations would last, although retail executives said the cyberattack was “extensive” and that it could take the company some time to fully resolve its impact.
Shares in M&S slid a further 2.4% on Monday morning, following a sharp fall last week, as investors reacted to the absence of positive news about the incident.
At that price, the company’s founder and chief executive, Will Shu, would be in line for a windfall of more than £170m.
Deliveroo further announced, before trading on Monday, that it had suspended its £100m share buyback programme.
The opening share price reaction took the value to 171p per share – still shy of the 180p on the table – and well under the 390p per share flotation price seen in 2021.
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Deliveroo’s shares have weakened nearly 50% since their market debut.
The deal is not expected to face regulatory hurdles as it provides DoorDash access to 10 new markets where it currently has no presence.
But a takeover would likely represent a blow to the City of London given the anticipated loss of a tech-focused player.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “If the deal is done at that price, the company will fail to shake off the ‘Floperoo’ tag it was saddled with after its disastrous IPO debut in 2021.
“Even though Deliveroo has finally broken through into profitable territory, the prolonged bout of indigestion around its share price has continued.
“The surge in demand for home deliveries during the pandemic waned just as competition heated up. Deliveroo’s foray into grocery deliveries has helped it turn a profit but it’s still facing fierce rivals.”
She added: “The DoorDash Deliveroo deal will be unappetising for the government which has been trying to boost the number of tech companies listed in London.
“If Deliveroo is purchased it would join a stream of companies leaving the London Stock Exchange, with too few IPOs [initial public offerings] in the pipeline to make up the numbers.”
A trade deal with the US is “possible” but not “certain”, a senior minister has said as he struck a cautious tone about negotiations with the White House.
Pat McFadden, the Chancellor of the Duchy of Lancaster, told Sunday Morning with Trevor Phillips there was “a serious level of engagement going on at high levels” to secure a UK-US trade deal.
However, Mr McFadden, a key ally of Sir Keir Starmer, struck a more cautious tone than Chancellor Rachel Reeves on the prospect of a US trade deal, saying: “I think an agreement is possible – I don’t think it’s certain, and I don’t want to say it’s certain, but I think it’s possible.”
He went on to say the government wanted an “agreement in the UK’s interests” and not a “hasty deal”, amid fears from critics that Number 10 could acquiesce a deal that lowers food standards, for example, or changes certain taxes in a bid to persuade Donald Trump to lower some of the tariffs that have been placed on British goods.
And asked about the timing of the deal – following recent reports an agreement was imminent – Mr McFadden said: “We’ll keep working with the United States and keep trying to get to an agreement in the coming weeks.”
As well as talks with the US, the UK has also ramped up its efforts with the EU, with suggestions it could include a new EU youth mobility scheme that would allow under-30s from the bloc to live, work and study in the UK and vice versa.
Mr McFadden said he believed the government could “improve upon” the Brexit deal struck by Boris Johnson, saying it had caused “an awful lot of bureaucracy and costs here in the UK”.
He said “first and foremost” on the government’s agenda was securing a food and agriculture and a veterinary agreement, saying it was “such an important area for the UK and an area where we’ve had so much extra cost and bureaucracy because of Brexit”.
He added: “But again, as with the United States, there’s no point in calling the game before it’s done. We’ve still got work to do, and we’re doing that work with our partners in the EU.”
The Cabinet Office minister also rejected suggestions the UK would have to choose between pursuing a trade deal with the US and one with the EU – the latter of which has banned chlorinated chicken in its markets – as has the UK – but which the US has historically wanted.
On the issue of chlorinated chicken, Mr McFadden said the government had “made clear we will not water down animal welfare standards with either party”.
“But I don’t agree that it’s some fundamental choice beyond where we have to pick one trading partner rather than another. I think that’s to misunderstand the nature of the UK economy, and I don’t think would be in our interests to put all our eggs in one basket.”
Also speaking to Trevor Phillips was Tory leader Kemi Badenoch, who said the government should be close to closing the deal with the US “because we got very close last time President Trump was in office”.
She also insisted food standards should not be watered down in order to get a deal, saying she did not reach an agreement with Canada when she was in government for that reason.
“What Labour needs to do now is show that they can get a deal that isn’t making concessions, so we can have what we had last month before the trade tariffs, and we need serious people doing this,” she said.