Britons are buying less, switching to cheaper products and shopping more often as they try to cope with soaring inflation, supermarket giant Tesco said today (17), describing the market environment as "incredibly challenging".
"We are seeing higher frequency shopping trips, so there's an elevation in the number of shopping trips, we are seeing basket sizes coming down a little bit," Tesco Chief Executive Ken Murphy told reporters after Tesco reported a fall in underlying UK sales in its latest quarter.
Britain's biggest retailer, which has an over 27 percent share of the UK's grocery market, said it was also seeing early signs of customers opting for cheaper products in areas of significant inflation.
"Those staples like pasta, bread and beans is where we're seeing customers choose to trade down to the entry level or the core own brand level product," he said.
He highlighted Tesco's convenience store business as trading well in the crisis.
Murphy added that he has vowed to work with suppliers to mitigate the impact of inflation as much as possible and support customers who are facing the most difficult economic conditions in decades.
"Although difficult to separate from the significant impact of lapping last year's (COVID) lockdowns, we are seeing some early indications of changing customer behaviour as a result of the inflationary environment," he said.
“Customers are facing unprecedented increases in the cost of living and it is therefore even more important that we work with our supplier partners to mitigate as much inflation as possible.”
Tesco said sales of clothing and general merchandise, such as homewares and toys, were most affected, while online sales were also affected as shoppers returned to supermarkets. It said the decline in the volume of goods sold was partly offset by inflation.
Reporting first-quarter results, Tesco maintained its full-year profit guidance despite reporting a 1.5 percent drop in underlying sales, broadly in line with analysts' forecasts. They had fallen 1.2 percent in the previous quarter.
Sales in the Republic of Ireland were down 2.4 percent but were up 2 percent overall because of strong growth in central Europe and at its Booker wholesale chain.
The group’s Booker wholesale arm also witnessed a “strong” jump in trading as it continued its recovery following the impact of pandemic restrictions on the hospitality sector.
