(qlmbusinessnews.com Wed, 4th Oct, 2023) London, UK —
Tesco, the UK's largest supermarket chain, is intensifying its efforts to lower prices in response to ongoing cost-of-living challenges faced by consumers. Tesco CEO Ken Murphy affirmed the company's commitment to reducing food prices wherever possible, recognizing the financial pressures experienced by many households across the country.
Murphy noted that the pace of food price increases is expected to continue slowing throughout the year, offering some relief to shoppers. Tesco has already seen a surge in profits for the first half of the year, primarily due to a decrease in wholesale food costs and an increase in the purchase of own-label products by customers seeking cost savings.
During the first half of the year, Tesco reported an 8.4% increase in sales compared to the same period last year, driven largely by higher prices. Retail profits also saw a significant rise of 13.5%, reaching £1.4 billion. Tesco attributed this increase to its cost-cutting measures and the attraction of more customers.
While Tesco and other major supermarkets faced allegations of profiting from soaring prices earlier in the year, a subsequent investigation by the Competition and Markets Authority found no evidence of profiteering but recommended that retailers enhance price transparency.
Tesco's improved financial performance has led the company to revise its annual profit forecast, now anticipating retail profits between £2.6 billion and £2.7 billion, up from the previous estimate of £2.5 billion.
The surge in global food prices triggered by Russia's invasion of Ukraine last year significantly raised the cost of grocery shopping. However, the British Retail Consortium recently reported the first monthly decline in food prices in two years for September.
According to Murphy, Tesco customers have turned to own-label products to manage their budgets, including indulging in the company's Finest range for at-home treats. Shoppers have also migrated from premium retailers to Tesco, although the supermarket chain faces relentless competition from discounters Aldi and Lidl.
Murphy expressed optimism that consumers would gain more confidence as the year progresses, asserting that customers are well-positioned for the upcoming Christmas season. The reduction in food price inflation has played a role in alleviating the overall UK inflation rate, which, although still high, prompted the Bank of England to maintain unchanged interest rates after 14 consecutive increases due to faster-than-expected price rises slowing in August.
This News Story is brought to you by QLM Business News, your Digital Media Channel
Visit QLM businessnews.com
For more business news stories also follow us on Facebook, X and Youtube.
To Help qlm business news bring you more new stories like this, please like, share and subscribe.
