The boss of the UK’s biggest supermarket chain said people had been ‘pretty resilient’ in the face of rising living costs
Shoppers in the UK are eager to celebrate Christmas this year despite global uncertainty, though they are likely to favour "marginally healthier" options and reduce alcohol intake, according to Tesco.
The chief of Britain’s largest supermarket retailer described consumers as "pretty resilient" amid geopolitical anxieties and the rising cost of living.
This comes as the company posted increased first-half sales and upgraded its annual profit expectations.
Ken Murphy, Tesco’s chief executive, said: “I think consumers in the UK have been pretty resilient in a very uncertain environment.
“And my sense is that customers will want to enjoy Christmas given all that’s going on in the world around them, I think they will want to celebrate whatever festive occasion that they celebrate for the next three months.”
The chief said food inflation was “well below” the rate of wage inflation, “so I think that’s something to feel really good about”.
“I think this is a really highly competitive industry and that is also a contributing factor to keeping a lid on food inflation,” he said.
For the six months to 29 August, Tesco’s sales excluding fuel and VAT totalled £33.8 billion.
Sales were 1 per cent higher when compared like-for-like with the same period last year, and 1.5 per cent higher in the UK alone.
Online sales surged by 8.4 per cent in the UK with average grocery orders growing, and sales for its rapid delivery arm Whoosh soaring by 37 per cent.
Mr Murphy said the retailer launched around 800 new and improved products during the first half of the year, including expanding healthy eating ranges such as a fibre-enriched bakery items, higher protein yoghurts, and more nutritious ready meals.
He also highlighted growing demand for low and no-alcohol options.
“I do think it could be a marginally healthier Christmas although customers do love to indulge,” Mr Murphy said.
This pointed to a broader trend of healthy living, Mr Murphy said, adding: “I think it probably started in Covid and has built momentum since then and, as with many trends like these, they start with younger people and work their way up.”
He said Tesco was expecting to see a more “moderate Christmas from an alcohol point of view” amid the wider trend.
Nevertheless, the supermarket is preparing to launch a range of new festive products like new desserts and party food.
It comes after sales of its “Finest” range jumped by 9 per cent year-on-year for the first half.
Meanwhile, fuel sales surged by nearly a fifth which Tesco attributed to higher oil prices pushing up the cost for consumers.
Tesco said a strong financial performance for the first half meant it was now expecting profits of between £3.15 billion and £3.3 billion for the full year – an improvement on the £3 billion to £3.3 billion range it had previously guided.
