ASDA can no longer claim to be the cheapest fuel retailer — after choosing to rake in bigger profits.
The findings by the RAC come days after the competition watchdog said fuel retailers are ripping off drivers and the amount of profit they make is “concerning”.
Asda has been in the line of fire amid concerns its debt-laden £6.8billion takeover by the Issa brothers and TDR Capital would lead to the supermarket becoming less competitive as it chased profits to pay hefty interest costs.
A Business Select Committee last year found its fuel profit margins had trebled since its takeover in 2021.
But Asda’s co-owner, Mohsin Issa, defended its position at the time, telling MPs it was still the cheapest for fuel.
Now the new RAC data shows Asda’s long-held position of cheap fuel champion is over.
In March, it charged an average 145p per litre for petrol, while Morrisons and Sainsbury’s charged 143p and Tesco, which was the cheapest, was at 142.7p.
Analysis shows Asda’s profit margins on fuel prior to its takeover were 4.49p on every litre. That has now almost doubled to 8.64p so far this year.
An RAC spokesman said: “Asda appears not to be the force it once was in fuel retailing.
“Gone are the days when it used to announce big headline-grabbing price cuts when wholesale prices fell.”
Asda said the RAC’s analysis included EG garages before they were converted. It said once they had switched to Asda, prices fell by an average of 2.5p per litre.
A spokesman said: “On a like-for-like comparison, Asda’s prices were comparable to other supermarkets.”
A senior industry source said Asda, while under Walmart ownership, deliberately undercut rivals by at least 1p on fuel to lure shoppers to its stores.
Since the Issa brothers’ takeover, the gap had narrowed significantly.
And as a result of weaker competition, the entire fuel market’s prices and profits have been able to drift higher. Petrol is up by 6p a litre this year.
Meanwhile, Asda is now trailing its rivals on groceries too, with sales growth up by just 0.8 per cent over the past 12 weeks, according to analysis from NIQ.
Sainsbury’s is at 7.9 per cent and Tesco 6.3 per cent growth.
VIRGIN TO ‘FLY BACK TO PROFIT’
A BOOM in holiday bookings is expected to fuel Virgin Atlantic’s return to profits, the airline’s boss said.
Its recovery has been slower than that of its rivals. However, despite posting a £139million loss for last year, revenues hit a record £3.1billion.
Chief exec Shai Weiss said “a loss is never satisfactory” but stressed it had made good progress and was on track to be in profit in 2024.
Virgin was weighed down by high interest rates after taking a £1billion loan to survive Covid travel restrictions.
The airline is majority-owned by Sir Richard Branson’s Virgin Group — with Delta Air Lines owning 49 per cent.
Meanwhile, budget airline Ryanair reported it had flown 13.6million passengers in March, 8 per cent more than last year.
It has cancelled 950 flights to Israel since October, although Wizz Air, easyJet and British Airways have resumed flights to Tel Aviv.
SHARES
BARCLAYS up 4.42 to 188.54
BP up 3.00 to 511.60
CENTRICA down 1.20 to 125.70
HSBC up 9.70 to 631.10
LLOYDS up 0.42 to 52.38
M&S up 4.70 to 266.70
NATWEST up 5.60 to 272.70
ROYAL MAIL up 9.80 to 236.40
SAINSBURY’S up 2.40 to 270.20
SHELL up 30.50 to 1747.50
TESCO down 1.30 to 293.60
CHANGE ITS SPOTS
SPOTIFY plans to increase the price of its streaming service again to cover the cost of its move into audio books.
The music giant will raise prices by between 79p and £1.58 in five markets, including the UK, by the end of April, a Bloomberg report claims.
Spotify raised the price of its monthly subscriptions to £10.99 last year.
It now has 236million subscribers, up 31million in 12 months. But the firm is still making a loss.
TOPPS & BOTTOM
FLOORING firm Topps Tiles says profits will be lower than expected as cash-strapped Brits put off home improvements.
It reported an 11.3 per cent drop in like-for-like sales in the three months to the end of March — following a 7.1 per cent drop in the previous quarter.
Revenues fell 5.9 per cent in the first half of the financial year, to £122.6million.
Topps, which has 304 shops, is the latest home improvement chain to warn that Brits are spending less on DIY, particularly costly kitchen and bathroom makeovers.
THE value of buy-to-let loans more than halved in the last three months of 2023 to £6.3billion, as higher mortgage rates put landlords off.
Repossessions of buy-to-let properties rose 56 per cent on the previous year, to about 500, UK Finance said.
DISNEY DAY OF DESTINY
A BITTER battle between Disney boss Bob Iger and activist investor Nelson Peltz ended last night with the House of Mouse claiming victory.
Mr Peltz, below, a billionaire investor and father-in-law to Brooklyn Beckham, had been pushing for a board seat to try to shake up Disney.
Elon Musk waded into the fight yesterday, posting on X that he would “definitely” buy shares in Disney if Mr Peltz was given a board seat.
However, Mr Iger received backing from large investors and from Star Wars creator George Lucas.
Both sides have spent millions of dollars campaigning to persuade investors to vote in their favour.
Peltz at one point called Disney “stupid” for rejecting him while the entertainment giant has called him “disruptive and destructive”.
The tussle comes as the entertainment giant has suffered a number of box office flops and heavy losses in streaming.
Harrison Ford film Indiana Jones And The Dial Of Destiny failed to cover its costs, resulting in a £106million loss, while animated film Wish also struggled to make an impact.
SMALL CAP WOE
A “FEEDING frenzy” on cheap British firms could kill off the FTSE Small Cap Index, a top City broker warns.
The number of companies on the Index — which includes Asos, Gym Group and Halfords — has fallen from 160 in 2018 to 114 now.
Charles Hall, of investment bank Peel Hunt, said that if the “relentless” pace of exits continues, the Index could be extinct by 2028.
There have been 12 takeovers of UK firms worth over £100million since January, which Mr Hall branded a “feeding frenzy”.