Tesco bosses have warned they are seeing ‘early signs of changing customer behaviour’ as households are squeezed by soaring inflation.
Ken Murphy, the company’s managing director, pointed to “unprecedented increases” in the cost of living for customers as he pledged to further improve value for money.
It came as the UK’s biggest supermarket chain revealed it had continued to increase sales in the last quarter despite pressure on spending and tough comparisons with lockdown-spurred sales over the past quarter. the same period last year.
Tesco said like-for-like group sales rose 2% to £13.6bn in the 13 weeks to March 28, compared with the same period last year.
The retailer said this represented a 9.9% increase from pre-pandemic levels in 2019.
However, the company’s UK operations said like-for-like sales fell 1.5% from the same period a year ago.
Tesco added that it had increased its market share against its main grocery rivals after investing in value-oriented promotional campaigns, such as its Aldi Price Match programme.
Mr. Murphy said: “While the market environment remains incredibly challenging, our laser focus on value, along with the daily dedication and hard work of our colleagues, has helped us outperform the market.
“While it is difficult to distinguish between the significant impact of overrunning closings last year, we are seeing some early signs of changing customer behavior due to the inflationary environment.
“Customers are facing unprecedented increases in the cost of living and so it is even more important that we work with our supplier partners to mitigate inflation as much as possible.
The group’s wholesale Booker arm also saw a “sharp” increase in trading as it continued its recovery from the impact of pandemic restrictions on the hospitality sector.
Meanwhile, fuel sales soared 44% to £2bn as Tesco witnessed a spike in petrol and diesel prices.