Tesco is luring customers away from rivals Waitrose and Marks & Spencer as customers look for cheaper alternatives
Tesco is luring customers away from rivals Waitrose and Marks & Spencer as customers look for cheaper alternatives.
The country’s largest supermarket said sales of products in its premium Finest range were up 15 percent in the 13 weeks to May 27.
Boss Ken Murphy said premium products – such as an £8 mix-and-match picnic and deli offer or desserts such as Eton Mess – lured cash-strapped customers away from higher-end retailers.
Customers have been hit with painful increases in their shopping and utility bills, leading many of them to switch to cheaper rivals.
Cost-of-living pressures have also led families to swap dining out to spend a little more on more indulgent dishes they can make at home.
Driving force: Tesco said sales of products in its premium Finest range were up 15 per cent in the 13 weeks ending May 27
“We made further progress in the development of our Finest offering, with the launch of 126 new products, nearly 70 of which are in our BBQ and Picnic range, including summer-inspired sweet treats and chilled desserts,” said Murphy.
“The recent launch of our Finest signature vegetable dishes is a great example of the increased focus on innovation, health and convenience and, of course, great tasting food that our revitalized product team delivers.” Danni Hewson, head of financial analysis at investment platform AJ Bell, said: ‘Cash is tight, but people still want to treat themselves.
‘Tesco has made a huge effort to make more tasty products to entice shoppers to go a little further and the fact that they can collect club card points at the same time is a blessing.
“It’s not just about price, it’s about quality too, and Tesco has worked hard to bring its Finest range to the attention of shoppers and to innovate the kind of products that have made Marks & Spencer and Waitrose so successful on the market. have brought to market.’
The FTSE 100 supermarket said UK sales were up 9 percent in the first quarter. The company praised “encouraging early signs that inflation is starting to ease across the market.”
Murphy said: ‘We are very aware that many of our customers continue to face significant cost of living pressures and we have taken the lead in reducing the prices of everyday essentials.’
The supermarket boss also dismissed criticism that the company had profited from the cost-of-living crisis with unreasonable price increases.
As prices of commodities such as milk, bread and pasta fall, Tesco had lowered its own prices, Murphy said, arguing that it was unfair for the Bank of England to blame grocers for high inflation.
He added, “We react pretty quickly when we see those commodities fall.”
Tesco shares fell 0.6 percent, or 1.6 pence, to 262.9 pence.