THERE are “encouraging early signs that inflation is starting to ease” after shoppers faced soaring food prices, according to the Tesco chief.
Ken Murphy, chief executive of the UK’s largest grocery chain, stressed that customers “continue to face significant cost-of-living pressures” but provided further optimism that rampant food inflation could have passed its peak.
Critics have accused supermarkets of “greedflation” – which is putting prices up to bolster profits – and there is a watchdog investigation under way into whether a “failure in competition” means customers are overpaying.
Murphy denied that they were profiteering, adding: "There are encouraging early signs that inflation is starting to ease across the market."
Latest figures revealed that food inflation hit 19.1% in the year to April.
The most recent official data showed that food inflation struck 19.3% in April, dipping only slightly from March’s eye-watering 19.6% and remaining close to the highest rate for more than 45 years.
It came as the supermarket group reported total sales of £14.8 billion for the 13 weeks to May 27, with a like-for-like sales increase of 8.2% against the same period last year.
Its UK division saw a like-for-like sales rise of 9% after it said it saw benefits from customers switching “from premium retailers” amid pressure on consumer budgets.
The Tesco chief executive said: “We are pleased with our performance in the first quarter, underpinned by our relentless focus on value.
“Customers continue to recognise our leading combination of great value and quality in every part of their basket – from essentials covered by our Aldi Price Match, through to our growing Finest range.
“We are very conscious that many of our customers continue to face significant cost-of-living pressures and we have led the way in cutting prices on everyday essential items.
The retailer added that it is “well-positioned for the months ahead” and held firm on previous financial guidance.
Charles Allen, a retail analyst at Bloomberg Intelligence, told the BBC's Today programme that inflation was a "huge factor" in Tesco's latest figures.
"The top commodity prices are starting to fall but it's important to remember that lower inflation doesn't mean deflation. It doesn't mean prices dropping, it just means prices going up less fast."
