SHARE OF THE WEEK: Tesco to give insight into outlook for food prices

Tesco will keep investors up to date on the trade next week – and provide a crucial insight into the outlook for food prices.

While the city will monitor how the supermarket giant fares financially, there will be a lot of interest in whether there is any reprieve en route for struggling shoppers.

There are signs that UK grocery inflation is slowing down, but in the four weeks to May 14 it still remained close to record highs at 17.2 per cent.

Rising food prices are a problem for supermarkets that have faced allegations of profiteering.

But in such a competitive market, and with Aldi and Lidl close behind, traditional grocers are under pressure to keep prices as low as possible for fear of scaring off customers.

Ahead of Tesco’s first quarter trading update on Friday, Matt Britzman, equity analyst for Hargreaves Lansdown, said: “Tesco’s focus on pricing, with key promotions such as low daily prices and Aldi price comparison, has helped it maintain market share in the past. a few years.

“That comes at a cost, and the accelerated cost-cutting program is expected to continue at a certain pace to help offset higher marketing spend and cost inflation.”

The supermarket has hit back at claims it is profit-driven, with profits of £2.6bn in the 12 months to the end of February.

Shareholders will be eager to see the group comment on how its margins are doing against the backdrop of higher supply chain costs.