The boss of Tesco has said the supermarket giant will do “whatever we can” to keep down the price of food for shoppers as it warned that uncertainty linked to the Iran war is clouding its outlook for profits.
The UK’s largest supermarket chain said it has not yet seen any impact on product availability or prices, excluding fuel, since the conflict began at the end of February.
However, it said has been in contact with the Government to help plan for a worst-case scenario which could see the ongoing war lead to shortages of carbon dioxide used by the food industry.
Ken Murphy, chief executive of Tesco, told reporters: “We haven’t seen any issues and are in very strong shape.
“We constantly talk to our suppliers and none of our suppliers have raised any issues.”
He also said the retailer does not recognise predictions from the Food and Drink Federation that food inflation could jump above 9% this year if the conflict continues, stressing that it has not yet seen an impact on prices.
Fuel prices have already jumped higher in recent months due to the war between US-Israeli and Iranian forces, which have impacted energy production facilities and shipments through the Strait of Hormuz.
Mr Murphy said: “We are in good shape in our fuel stocks.
“We have seen elevated demand recently but we are still very competitively stocked.”
The boss also added that the retailer has not yet seen any impact from the conflict on customer sentiment in the UK.
It came as Tesco said that profits could dip over the current year as it flagged increased uncertainty linked to the conflict in the Middle East.
The UK’s largest supermarket group reported stronger-than-expected adjusted operating profits of £3.15 billion for the year to February 28, up slightly from £3.13 billion a year earlier.
The retailer said it expects this to be between £3 billion and £3.3 billion over the current financial year, telling shareholders it was “providing a wider range of guidance than we were previously planning” due to uncertainty caused by the Iran war.
Tesco also revealed that sales, excluding VAT and fuel, grew by 4.6% to £66.6 billion for the past year.
The group said on Thursday that it plans to make a further £500 million in cost savings in 2026/27, after surpassing its £535 million savings target last year.
Mr Murphy added: “We are committed to doing whatever we can to help keep down the cost of the weekly shop, and with the conflict in the Middle East creating further uncertainty for consumers and the economy more broadly, that commitment matters more than ever.
“Over the last year, despite cost pressures from new regulation, we have increased our investments in keeping prices low, further improving quality and offering even better service.
“Customers are choosing to shop more with us as a result, leading to our highest market share for over a decade.”
Tesco also announced that it will hand a £65 million award to its staff across its stores, warehouses and customers engagement centres following the latest performance.
