Tesco raises prices on 1000 products
Britain’s largest supermarket, Tesco, has increased the price of more than 1,000 products in the past two weeks. The firm raised prices on products including cheese, chocolate and bananas by an average of 11%, according to the Press Association.
Tesco says it held off raising prices for as long as it could, and insists it is still competitive when compared to Asda, Sainsbury’s and Morrisons.
It comes as rivals Aldi and Lidl put pressure on the big four supermarkets.
All shops are having to deal with increases in the cost of the goods they sell. The prices of milk powder, potatoes and pork have all risen much faster than the official inflation figure of 2%.
“There’s a lot of tension between the need be competitive and the need to boost margins,” said independent retail expert Richard Hyman.
In October 2016, Tesco’s chief executive Dave Lewis promised to get profit margins up to 3.5-4% by 2020. “Now it’s less than six months away,” Mr Hyman says, “the pressure is on.”
A weak pound is partly to blame, as it means that it costs more to import goods.
“Over recent months, cost pressures have continued to build and impact the market,” Tesco said in a statement.
“We’ve worked hard to offset these pressures, and focused on protecting our customers for as long as possible. But, like the wider market, we have had to reflect these pressures in the price of some products.
“For the majority of products that have increased in price over the last three weeks, we still beat or match the cheapest of the big four.”
The Press Association found that a pack of five bananas is now £1, up from 90p, and own-brand pasta rose to 65p from 50p.
However, Tesco has also dropped prices on 121 lines during the past three weeks, including some wines and soft drinks.