Tesco vows to ‘drive down food bills’ as half-year profits rise to £1.4bn
Tesco has insisted it is “doing everything we can to drive down food bills” as it reported lower prices on around 2,500 products
The UK’s biggest supermarket chain also reported a jump in profits for the first half of the year after wholesale food costs came down.
Tesco’s half-year sales to the end of August rose 8.4 per cent compared with the same period last year, largely through higher prices.
The firm’s profits increased to £1.4bn, up 13.5 per cent, as it cut its own costs and attracted more customers from higher-priced rivals. It currently holds a 27 per cent share of Britain’s competitive grocery market.
It forecast full-year profits would be between £2.6bn and £2.7bn, up from a previous forecast of £2.5bn.
The company’s chief executive, Ken Murphy, said the rise in food prices was slowing and that trend would continue this year, helping to ease pressure on shoppers.
“We are committed to doing everything we can to drive down food bills and Tesco is now consistently the cheapest full-line grocer,” he said.
“We are in a strong position to keep investing for customers, and will continue to lower prices wherever we can – doing everything in our power to make sure customers can have a fantastic, affordable Christmas.”
Sophie Lund-Yates, analyst at Hargreaves Lansdown, said: “It seems Tesco’s performing its own supermarket sweep, knocking competition out the way in the process and loading up on market share.
“As a full-line retailer it maintains an edge over the likes of Lidl and Aldi. The real test will be Christmas, where consumers will want to put on as much of a feast as possible, but where wallets may not allow it.”
The British Retail Consortium said food prices rose 9.9 per cent in the year to September, down from 11.5 per cent in August – the first monthly drop in two years.
