By James Davey
LONDON (Reuters) -Changes to British consumers’ behaviour that emerged at the start of a cost-of-living crisis in 2022, such as more eating at home, have stuck, the boss of Tesco, the country’s biggest food retailer, said on Thursday.
“When we had the first cost of living crisis three years ago there was quite an adjustment in shopping habits at that stage and those habits have stuck,” Tesco CEO Ken Murphy told reporters after the group reported first half results.
Tesco, whose share of Britain’s grocery market has grown to 28.4% – up 0.8 percentage points on the year – was seeing a continuing strengthening of the “dining in” trend, with consumers opting for premium supermarket products over a trip to a restaurant, partly to save cash. This is bad news for Britain’s beleaguered hospitality sector.
Murphy said this was evidenced by year-on-year sales growth of 16% for Tesco’s premium own brand “Finest” range in its first half to August 23 – a third year of double-digit sales growth.
“It might be kind of a COVID hangover, it might be part of the Netflix phenomenon of dine in, watch a movie, have a bottle of wine, and (Finest’s) a great proposition at great value, it could be a money saving exercise,” he said.
“It’s hard to put your finger on what the single reason for the trend is, but it is definitely a trend.”
Murphy said a recent trend was an uptick in people buying fresh food to cook more from scratch.
He said UK consumers were also worried about the upcoming government budget which is likely to include tax rises, and the economic outlook.
Murphy urged finance minister Rachel Reeves to deliver a “pro-growth and pro-jobs” budget on November 26.
“In the last budget (October 2024), the industry and the sector incurred substantial additional operating costs, we’re doing our best to deal with them but enough is enough,” he added.
(Reporting by James Davey; Editing by Emelia Sithole-Matarise)
