Independent UK: Businesses pass on cost of economic crunch to the consumer

[marmar]

Prices up, profits up: businesses pass on cost of economic crunch to the consumer

By Martin Hickman, Consumer Affairs Correspondent
Saturday, 17 May 2008


Concern is rising that consumers rather than businesses are bearing the full cost of the credit and raw material crunches that are destabilising the world economy and threatening to plunge some countries, including Britain, into recession.

Reporting a 45 per cent jump in profits to £883m yesterday, British Airways became the latest major company during the past week to report bumper sales after optimistic financial reports from Sainsbury's and Premier Foods.

BA has been in the headlines over the chaos during its recent opening of Terminal 5 at Heathrow airport, when thousands of passengers were left stranded and thousands of items of luggage were lost.

On Wednesday, Sainsbury's announced that profits had leapt by 28 per cent to £488m, at a time when customers are paying much higher prices for basic staples such as bread, eggs and milk because of soaring demand on world markets.

A day earlier, Premier Foods, which owns Hovis and Mr Kipling, indicated that it would shield its profits from the turbulence hitting world commodity prices by cutting costs and passing on planned price rises to consumers.

The profits announcements, which follow sharply higher profits from the oil giants Shell and BP, Tesco, and the gas company Centrica – which warned on Monday it is about to put up prices – come as British consumers face gloomier job prospects and soaring inflation. ......(more)

The complete piece is at: http://www.independent.co.uk/news/uk/home-news/prices-up-profits-up-businesses-pass-on-cost-of-economic-crunch-to-the-consumer-829921.html