Tesco trading update set to shed light on extent to which spiralling cost of living is impacting consumer spending
Britain’s biggest supermarket will next week shed light on the extent to which the spiralling cost of living is impacting consumer spending.
Tesco’s trading update for the three months to the end of May comes as shoppers face rising energy bills while wages fail to keep up with inflation.
Analysts will be watching for any word from boss Ken Murphy on how shoppers are changing their behaviour when he delivers the update on Friday.
The supermarket giant, which dominates the UK with a 27.4 per cent share of the market, has pledged to keep prices under control for customers with Murphy promising a ‘laser focus’ on affordability.
And so far it has bucked the trend of families flocking to the German discounters Aldi and Lidl to save cash, stealing market share from rivals for 17 months in a row.
Tesco’s scale gives it more bargaining power with suppliers and more control over how much it passes increased costs on to customers.
But Hargreaves Lansdown equity analyst Matt Britzman said he will be looking for commentary on how long and by how much Tesco can keep prices under control.
In April, Tesco forecast that profit for the whole year would be between £2.4billion and £2.6billion and analysts will also be looking at whether this prediction stays intact.
Jefferies analyst James Grzinic said recently its expectations already assume falling grocery volumes and fiercer competition for market share.