Tesco ‘working with suppliers’ to keep prices low

By Matt Atherton contact

- Last updated on GMT

Tesco was working with suppliers to keep prices low for customers, it said (Tesco PLC/Flickr)
Tesco was working with suppliers to keep prices low for customers, it said (Tesco PLC/Flickr)

Related tags: Like-for-like sales, Customer service

Tesco pledged to work with its suppliers to keep food prices low in its first-quarter trading statement, which reported a sixth consecutive quarter of like-for-like sales growth.

Group like-for-like sales were up 1% in the 13 weeks to May 27, re[prted Britain’s biggest supermarket today (June 16).

The supermarket said it would harness suppliers’ help to offset inflationary food price rises.

A Tesco statement said: “We have worked hard with our supplier partners to protect customers from inflationary pressures and to keep prices as low as possible.

“Worked hard with supplier partners’

“Our price position relative to competitors has improved and our efforts to offset inflation have been recognised by our customers.”

Tesco chief executive Dave Lewis added: “In tough market conditions, we have stayed true to our commitment to helping customers – working closely with our supplier partners to keep prices low.

“Customers have responded by doing more of their shopping with us and as a result we continue to grow volumes, particularly in fresh food.”

UK & Republic of Ireland like-for-like sales increased 2.2% across the 13 weeks, driven by UK fresh food sales. Fresh food volumes were up 1.6% in the quarter, Tesco added.

Group like-for-like sales were up 0.8% at constant currency. But, international like-for-like sales fell 3%, after Tesco discontinued selling unprofitable tobacco and alcohol in Thailand.

 ‘A good start to the year’

“This is a good start to the year, with our sixth consecutive quarter of positive like-for-like sales growth across the group. We are confident in our plans to create long-term, sustainable value for our key stakeholders and to deliver on the ambitions we have set out.”

FoodManufacture.co.uk approached Tesco to see how maintaining low prices would impact suppliers.

Tesco’s decision to keep prices low had paid off for the supermarket, analyst money.co.uk said. It was fighting back against the growing market share of retailers, it added.

Money.co.uk editor-in-chief Hannah Maundrell said: “Tesco is still faced with fierce competition from the likes of Aldi and Lidl but it’s starting to catch up.

“Its focus on improving customer service and keeping prices competitive despite inflation, seems to have paid off in terms of customer loyalty, and it’s actually getting us coming back for more.”

Tesco results – at a glance

  • Group like-for-like sales up 1%
  • Group like-for-like sales up 0.8% at constant currency
  • UK & Republic of Ireland like-for-like sales up 2%
  • UK fresh food like-for-like sales up 1.6%

Related topics: Business News, Retailing Crisis, Services

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