Tesco CEO Ken Murphy has said suppliers supporting its new year price lock campaign are “100% behind” the move as it looks to help shoppers by keeping prices as low as possible amid cost-of-living pressures.
Earlier this month, Tesco announced it would be extending its price lock on over 1,000 products until Easter as food inflation soared to 13.3%.
This comes as the leading retailer posted its Q3 and Christmas results today (12 December), which saw a 6.1% increase in like-for-like sales for the 19-week period to 7 January (to £19.7bn).
Speaking of the supermarkets performance, Murphy said that “Tesco is in the strongest value position that’s ever been.”
“Our supply chain is in great shape, our store teams are in great shape and what we’ve been particularly pleased with is that every part of the group has performed well.”
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He added that this was due to “a combination of an increase in distribution, an increase in the range of products that we were offering through the Finest range,” as well as Tesco’s ‘That’s dinner sorted’ initiative during the summer, which Murphy said had been “really successful.”
Tesco’s strong performance was also aided by its “reputation for quality”, as consumers traded down from premium supermarkets and restaurants, with sales of Tesco’s Finest range up 8.2%.
As consumers looked to trade down from eating out and ordering takeaways to cut costs, Murphy said this growth was “really meaningful” to the Big 4 grocer.
GlobalData retail analyst Joe Dawson said the key driver for Tesco’s strong sales has been “a focus on value and quality as consumers’ disposable incomes were squeezed by rising inflation.”
He added that the boost in fresh food sales (up 8.1%), Tesco’s value offer through its Aldi Price Match and Low Everyday Prices ranges, as well as its Clubcard loyalty scheme have all “highlighted the retailer’s competitive pricing and allowed it to protect its market share”.
He added that with consumer spending likely to fall during the first quarter of 2023, “Tesco looks well braced to maintain growth and market share despite pressure from discounters.”
Tesco also saw its convenience channel performing well with like-for-like convenience sales up by 5.5% over the quarter, with a further 6.7% boost over the key three-week Christmas period.
Murphy said Tesco’s ability to “provide great value, great quality and great convenience” will be constant this year.
He added that he was “really pleased” with the supermarkets convenience performance last year, as it continues to improve this with “an ambitious convenience plan” for 2023.
