Tesco bosses have warned they are seeing “early indications of changing customer behaviour” due to pressure on households from soaring inflation.
Chief executive Ken Murphy highlighted “unprecedented increases” in the cost of living for customers as he committed to further improving value for money in a move to ensure that Tesco continues to “outperform the market”.
The UK’s largest supermarket has hit its full year profit guidance of between £2.4bn and £2.6bn (down from £2.65bn YoY), despite seeing a 1.5% fall in like-for-like UK sales over the 12-week period ending 28 May 2022.
Last year’s figures were boosted by a third pandemic lockdown over the same period.
At the same time, like-for-like group sales increased by 2% to £13.6bn, representing a 9.9% increase against pre-pandemic levels from 2019.
Tesco added that it has grown its market share against key grocery rivals after driving investment into value-focused promotional campaigns, such as its Aldi Price Match programme.
READ MORE: Tesco to shed more light on customer spending amid cost-of-living crisis
“Whilst the market environment remains incredibly challenging, our laser focus on value, as well as the daily dedication and hard work of our colleagues, has helped us to outperform the market,” Murphy said.
“Although difficult to separate from the significant impact of lapping last year’s lockdowns, we are seeing some early indications of changing customer behaviour as a result of the inflationary environment.
“Customers are facing unprecedented increases in the cost of living and it is therefore even more important that we work with our supplier partners to mitigate as much inflation as possible.
The group’s Booker wholesale arm also witnessed a “strong” jump in trading as it continued its recovery following the impact of pandemic restrictions on the hospitality sector.
Meanwhile, fuel sales soared by 44% to £2 billion as Tesco witnessed a surge in petrol and diesel prices.
Today’s trading statement comes as Lidl is taking Tesco to court for copying its distinctive logo to promote Clubcard Prices. The dispute is set to cost the supermarket rivals £2.35 million.
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