The boss of supermarket giant Tesco has said that people are being more careful than ever with their shopping as the pressure of the cost of living continues to loom. Chief executive Ken Murphy said customers were looking for ways to cut costs and change their shopping habits as a result.
He said people appeared to be shifting from branded items and minimising on eating out in an attempt to save their pennies. He also said the supermarket's research showed that customers would be looking for an "affordable" way to enjoy Christmas this year.
This comes as Tesco announces another pay rise for its colleagues to help cope with rising costs. This is the second hourly increase for staff in the last year, equating to an 8% rise. You can get more consumer news and other story updates straight to your inbox by subscribing to our newsletters here.
Read more: Tesco announces second pay rise in a year to make sure staff 'don't need food banks'
Mr Murphy said the measures had been introduced to try to help workers cope. He said: "We know our colleagues are experiencing the same pressures as our customers." And he said that the measures taken so far - raising pay twice, increasing free meals in canteens, and hiking staff Clubcard discounts - had been done to "try to make sure our colleagues don't have to go to food banks".
The supermarket reported its operating profits today. They saw a 10% fall in retail operating profits but sales for the whole group, excluding its fuel, increased by more than 3%.
Speaking to the BBC, Ken Murphy said customers were trying to "make their money go further, whether they are switching from branded products, between categories or cutting back on eating out". "As we look to the second half [of the year], cost inflation remains significant, and it is too early to predict how customers will adapt to ongoing changes in the market. We know our customers are facing a tough time and watching every penny to make ends meet."
The CEO told reporters while discussing the supermarket's first half results that he was expecting changes to how people celebrated Christmas due to the cost of living crisis, reports Reuters.
"We think it's going to be a Christmas that people are going to want to celebrate, but clearly they're going to want to celebrate it in an affordable way. For that we think there will be more dining-in and there'll be more celebrations in the home," he said. "We believe that maybe the gifts this year will be smaller and to a tighter group within the family and friends unit and we're adapting our proposition to suit those trends," he said.
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