Tesco chief executive Ken Murphy has stated that while the supermarket is working to lower prices, price reductions alone are not enough to address the broader challenges facing the grocery sector. Speaking to the BBC, Murphy emphasised the company's commitment to reducing food bills amid ongoing cost-of-living pressures.
The UK's largest supermarket chain reported a 13.5% rise in retail profits to £1.4bn for the six months to August, driven by cost-cutting and increased customer numbers. Sales rose 8.4%, primarily due to higher prices. Tesco has now raised its annual profit forecast to between £2.6bn and £2.7bn, up from £2.5bn.
Murphy noted that customers are increasingly switching to own-label products, including the premium Finest range, as they seek savings. He added that the pace of food price inflation would continue to slow, providing some relief to shoppers. However, he acknowledged intense competition from discounters Aldi and Lidl.
Earlier this year, major supermarkets faced allegations of profiteering amid soaring prices, but a Competition and Markets Authority investigation found no evidence of wrongdoing. The regulator did, however, call for clearer pricing. Murphy defended Tesco's pricing strategy, stating that the company is doing 'everything we can to drive down food bills'.
Industry data from the British Retail Consortium showed the first monthly fall in food prices for two years in September. Murphy expressed cautious optimism about consumer confidence heading into Christmas, saying 'the customer is in good shape'. The Bank of England recently held interest rates after 14 consecutive increases, as inflation eased more than expected.
