Suppliers do not get the hard deal that many say they do, a City analyst said this week, drawing on insights into the relative financial performances of both retailers and suppliers.

Speaking at IGD's Global Retailing conference on Tuesday, James Edwardes Jones, a consumer analyst at broker Execution, compared recent operating margins released by retailers such as Tesco, Sainsbury and Morrisons with those of suppliers such as Coca-Cola, Procter and Gamble and Cadbury Schweppes.

Jones claimed the suppliers' margins dwarfed those of the retailers, averaging 15% compared with 4%.

The return on invested capital for suppliers was far higher at 20-25% compared with retailers where it averaged below 10%.

Jones told The Grocer: "The data shows that suppliers make more money on every pound they receive from sales than the retailers, and at a higher return on their invested capital."

In another comparison, Jones showed that over the past four years Nestlé's price inflation had consistently been greater than Tesco's price increases.

He also said that an investor would be 26% better off now if he had invested in a basket of shares from suppliers five years ago than if he had invested in a basket of shares from retailers. "The point is to challenge the received wisdom that retailers have a whip in their hands when dealing with their suppliers," he said.

Alison Ward, director of communications at the BCCCA, told The Grocer that the analysis was too shallow. "You need to look at the whole supply chain too, and include energy and labour costs and inflation.

"The change in the sugar regime and the costs suppliers have incurred have been at least partly responsible for the loss of 16,000 jobs in the sector.

"Getting price rises from retailers to cover these costs is very difficult."