Tesco is “lowering prices as quickly as possible”, its chief executive said, in the latest sign that Britain’s battle on inflation is nearing its end.
Britain’s biggest supermarket said it had recently lowered prices on thousands of lines across its stores as “cost inflation headwinds ease”, adding: “We continued to work with our supplier partners to lower prices for customers as quickly as possible.”
It said this meant Tesco had consistently been the cheapest of the traditional supermarkets for almost two years.
Ken Murphy, Tesco chief executive, said: “The combination of price, quality and innovation means we are as competitive as we have ever been.”
It follows recent industry figures which suggested Tesco has been growing its market share over the past year. According to the latest Kantar figures, Tesco is by far Britain’s largest supermarket, holding around 27.8pc of the grocery market, up from 27pc last October.
Kantar said this marked its strongest position since January 2022.
Mr Murphy said the retailer was “in good shape” going into the Christmas period.
It came as the supermarket raised its profit forecasts for the year. Tesco said it was now expecting to deliver £2.9bn in retail adjusted operating profit – a key measure for supermarkets – for the 12 months to the end of February. This was up from earlier forecasts of at least £2.8bn.
In the first half of the year to August 24, pre-tax profits were up almost a fifth to hit £1.39bn. Revenues were up 4pc to hit £31.5bn.
Mr Murphy said the sales were boosted by stronger demand for its “Finest” range, with more than 20m customers buying from the line in the first half of the year.
Tesco has also been buoyed by growing take-up of its loyalty card scheme. It said more than 23m households had a Clubcard over this period.
The update comes weeks after Mr Murphy suggested Tesco was considering how it could evolve its loyalty scheme.
He said data from the scheme could start to nudge shoppers when they were buying too many unhealthy items.
Speaking last month, Mr Murphy said: “I can see it nudging you, saying: ‘look, I’ve noticed over time that in your shopping basket your sodium salt content is 250pc of your daily recommended allowance. I would recommend you substitute this, this and this for lower sodium products to improve your heart health’.”
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