“For our customers, that means looking very critically at where they’re spending their money. They are already planning changes to the way they buy, and we’ll make sure we’re there to support them.
His remarks came as Britain’s biggest supermarket warned profits could be cut this year as it battles its own cost increases and keeps prices low.
Mr Murphy added: “We are in a very good position from a price competitiveness point of view – we have very strong leverage through Aldi price matching, daily low prices and Clubcard prices.”
“We plan to make sure we stay close to where it is and offer no reason to go anywhere else from a price competition perspective. It’s our commitment and it’s unwavering no matter what happens in the market.
Profits jumped for the year to February 26 as sales, including fuel, rose 6% to £61.3billion and pandemic-related costs fell.
UK like-for-like sales increased 0.4% year-on-year and 8.2% year-on-year.
Pre-tax profit more than tripled to £2bn, from £636m the year before, when it had £900m in Covid costs.
Tesco forecasts adjusted operating profit of between £2.4bn and £2.6bn this year, a wider than usual range as it faces energy, property and staffing costs higher.
Mr Murphy said the retailer had raised prices “a little less and a little later than the market”, a move that paid off.
It matches Aldi on 650 prices and offers everyday low prices on thousands of home and beauty items to keep customers from going to “Home Bargains or B&M”.
Its value range, Exclusively at Tesco, is available more widely in stores, as Tesco expects customers to swap more expensive branded goods for cheaper alternatives as their energy bills rise.
Tesco said overall prices had fallen slightly over the past year and had managed to keep increases below the 5.2% inflation rate in March.
Mr Murphy declined to say whether he would cut prices further or be forced to raise them.
“It’s very difficult to predict. What I can say, what you’d expect, is that energy-intensive products are coming under cost pressure, and protein is coming under cost pressure as food costs go up considerably.
“We stay close to our suppliers and work with them to manage the inflation of their inputs, but we are very rigorous to ensure that we do not accept any costs that would be unnecessary.
“We are as well equipped, if not better, than anyone else in the market to respond [to cost-of-living] and it is a deep commitment to ensure that we care for customers and staff in what we consider to be their hour of greatest need.
Tesco also announced it would pay nearly £50m in ‘thank you’ bonuses to 290,000 shop, call center and warehouse workers by the end of May.
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This notice was published: 2022-04-13 11:24:30