Britain’s largest supermarket has called on the government to lighten the tax and energy load on retailers to help them shield households from rising prices, as the grocer widened its profit guidance amid the escalating conflict in the Middle East.
Reporting an 8.5 per cent rise in annual pre-tax profit, Ken Murphy, chief executive of Tesco, used the FTSE 100 group’s full-year update to make a direct appeal to Whitehall. “In terms of tax pressures, industry and energy in particular, anything the government can do to help us to keep prices low for customers is welcome,” he said.
Murphy pledged that Tesco would do “everything in our power” to cushion shoppers from any renewed bout of inflation triggered by the war in Iran, which he said was “creating further uncertainty for consumers and the economy more broadly”. He praised ministers for drawing up worst-case contingency plans, including scenarios involving a prolonged closure of the Strait of Hormuz and a breakdown in the carbon dioxide supply chain that could, by summer, translate into shortages of chicken, pork and other staples.
The Tesco boss said the grocer was “in constant contact with the government in various guises and through various departments” to assist with that scenario planning. For now, he insisted, neither Tesco nor its suppliers had reported “no issues” in the supply chain or any “meaningful changes in customer behavioural patterns as a consequence of the conflict so far”.
The group, which commands about 28 per cent of the UK grocery market, widened its guidance for the current year, forecasting adjusted operating profit of between £3 billion and £3.3 billion, against £3.15 billion delivered in the year just closed. Tesco said the final outturn would depend on the duration of the conflict, its knock-on effects on UK household spending and the wider economic climate.
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