UK shoppers ‘displaying Stockholm syndrome’
Business digest: fund manager compares acceptance of high supermarket prices to a hostage-captor relationship
UK shoppers' persistent contentment with supermarkets in the face of rising prices is paramount to Stockholm syndrome, a fund manager has declared.
The British have experienced steep food price inflation – 4.7 per cent compared with the eurozone's 2.7 per cent – but continue to be comparatively happy with the situation.
Jim Leaviss of fund manager M&G said that supermarkets have deliberately taken advantage of the fact that "everyone knows that prices are on the rise". He suggested people wrongly presume that rising food bills are simply a result of shops passing on their increasing costs.
"When food price inflation started to moderate post the last shock in 2008, European food retailers cut prices," he explained. "In the UK the supermarkets realised that they had pricing power and kept raising them; this resulted in the strong relative profitability that they enjoyed."
Leaviss compared the willingness of shoppers to accept the supermarkets' higher prices with Stockholm syndrome, the psychological phenomenon where hostages start to empathise with their captors.
Read a full report on the Daily Telegraph.