Tesco said sales in its UK stores had fallen in recent weeks as its customers faced an “unprecedented increase in the cost of living”.
The UK’s largest supermarket said it had gained market share, but sales in the three months to May 28 fell 1.5% from the same period last year when the UK was blocked.
Ken Murphy, CEO of Tesco, said: “The market environment remains incredibly challenging.
He said it was difficult to separate the significant impact of last year’s coronavirus blockades from other influences on buyers, but said Tesco saw “some early indications of a change in customer behavior as a result of the inflationary environment”.
He said: “Customers are facing an unprecedented increase in the cost of living, so it is even more important to work with our supplier partners to mitigate the highest possible inflation.
Tesco said sales of clothing and general merchandise, such as household goods and toys, were most affected, while online sales were also affected as shoppers returned to supermarkets. It says that the decline in the volume of goods sold is partially offset by inflation.
Sales in the Republic of Ireland decreased by 2.4%, but increased by 2% overall due to strong growth in Central Europe and the wholesale chain Booker.
Sign up for the daily Business Today email or follow the Guardian Business on Twitter at @BusinessDesk
The trader’s comments came after more than one in five (22%) of those surveyed said they had missed a meal or reduced their meals because they could not afford to buy food.
In-store prices rose in May to the fastest pace in more than a decade, according to the British Retail Consortium and NielsenIQ. Food inflation jumped to 4.3% in May from 3.5% in April, the highest level since April 2012.
On Thursday, the Bank of England warned that the core rate of annual consumer inflation is likely to rise above 11% in October. Inflation is already at a 40-year high of 9%.
Add Comment