Tesco is trying to “lower prices wherever we can” as customers continue to grapple with cost-of-living pressures, its boss has said.
Ken Murphy said the pace of rising food prices would continue to slow this year, easing the pressure on shoppers.
The UK’s biggest supermarket chain reported a jump in profits for the first half of the year after wholesale food costs came down.
It said customers had been buying more own-label products to save money.
Mr Murphy told the BBC consumers were starting to see “stability in [grocery] pricing and actually they’re starting to see prices coming down”.
“We know how challenging it is for many households across the country, as they continue to grapple with ongoing cost of living pressures,” he added.
“We are committed to doing everything we can to drive down food bills.”
In the six months to the end of August, Tesco’s sales were up by 8.4% compared with the same period last year, mainly due to higher prices.
Its retail profits rose by 13.5% to £1.4bn, as the grocer cut its own costs and attracted more customers.
Earlier this year, the major supermarkets faced claims that they were profiting from soaring prices, but they denied making too much money.
A Competition and Markets Authority investigation later found no evidence of profiteering, but the regulator told retailers to make pricing clearer.
On Wednesday, Tesco raised its annual profit forecast, saying it expects retail profits to be between £2.6bn and £2.7bn, up from a previous forecast of £2.5bn.
Back in April, it forecast it would struggle to increase profits this year.
Switching to own-brand products
Global food prices surged after Russia’s invasion of Ukraine last year, driving up the cost of a weekly shop.
But this week industry body the British Retail Consortium said September had seen the first monthly fall in food prices for two years.
Mr Murphy said Tesco’s customers had been switching own-label products to save money, including “treating themselves at home” with goods from its Finest range.
Shoppers had also been switching to Tesco from premium retailers, he added, although the grocer continues to face intense competition from discounters Aldi and Lidl.
Mr Murphy said consumers were likely to feel more confident as the year went on. “We think the customer is in good shape for this Christmas,” he said.
Falling food price inflation has helped to ease the overall rate of UK inflation, which remains high.
This month the Bank of England left interest rates unchanged after 14 consecutive increases, after price rises slowed more quickly than expected in August.
Source : bbc