Donโt make it harder for grocers to lower prices, Tesco boss urges Government
The boss of Tesco has made a plea to the Government to not โmake it harderโ for the grocery sector to keep prices low for customers ahead of the autumn Budget, despite revealing profits could surpass ยฃ3 billion this year.
Households budgets remain squeezed and shoppers are increasingly seeking out value, according to the UKโs biggest supermarket.
Ken Murphy, Tescoโs chief executive, said he was hoping the autumn Budget would not put additional pressure on grocers that are already facing much steeper business costs.
โWhat weโd love to see is a Budget thatโs pro-growth and pro-jobs which, as a result, will help customers with the cost of living,โ Mr Murphy said.
โWe know that people are worried about what lies ahead and weโre seeing that in the consumer sentiment.
โAs a food retailer, we operate in a very competitive and very tough environment, and I think our one ask is donโt make it harder for the industry to deliver great value for customers.
โIn the last budget, the industry incurred substantial additional operating costs.
โWeโre doing our best to deal with them but enough is enough.โ
Tesco has said the higher rate of employer national insurance added some ยฃ235 million to its yearly costs, while new packaging taxes added about ยฃ90 million.
Nevertheless, the supermarket said on Thursday that its profits for the year were likely to be higher than previous estimates.
It now expects underlying earnings for the full year of between ยฃ2.9 billion and ยฃ3.1 billion, up from its previous guidance range of between ยฃ2.7 billion and ยฃ3 billion.
It comes after its adjusted operating profit rose by 1.6% to ยฃ1.67 billion for the first half of 2025, compared with the same period last year, on the back of UK sales jumping by 4.9%.
Mr Murphy said shoppers were responding well to its efforts to lower prices on hundreds of products, which was boosting the volume of items put in peopleโs baskets.
This was particularly the case for fresh food, which is largely own-brand, and he said indicated more consumers โscratch cookingโ at home.
The boss said the industry remains โincredibly competitiveโ amid a price war heating up among rival supermarkets, and he was expecting that to continue into the second half of the year.
