Tesco has reduced the price of a pint of milk from 95p to 90p in anticipation of rising domestic delivery costs.
Tesco’s board of directors is feeling the effects of higher prices, as profits have decreased despite an increase in sales.
High energy and labor costs, as well as 17.5% food inflation, have reduced the company’s earning capacity.
However, the retailer also disclosed the first reduction in milk prices since May 2020. The price per pint has decreased from 95p to 90p, and the price for two drinks has decreased from £1.30 to £1.25. Until the beginning of July, prices on over a thousand common commodities will be frozen.
The chain would buyback £750 million in shares in addition to £1 billion.
Despite revenues rising to £65.7 billion from £61.3 billion, profits fell to £2.63 billion from £2.82 billion.
Ken Murphy, chief executive officer, remarked, “Our results reflect our continued investment in delivering great value and quality to our customers while also caring for our employees.”
Despite extraordinary escalation in supplier pricing and corporate costs.
Simultaneously, Tesco’s preliminary full-year results indicated that the company is “more competitive than ever before” and that its prices were “significantly lower” than the 17.5% food inflation rate.
Mr. Murphy also predicted that inflation would decline later this year due to falling crude and grain prices. While rice and protein prices would remain elevated.
The Sunday Times reported that the retailer is pressuring suppliers for price reductions and has a team that closely monitors the costs confronting suppliers.
Eliminating hundreds of store management roles and all food stands and hot delis saved £1 billion by February 2024.
Increases in delivery costs will be implemented. The minimum expenditure and fee for online grocery shopping will increase on May 2.
When the £40 minimum spend for residential delivery is not met, a £4 fee is applied. Next month, the minimum spend will increase to £50, and the fee for not meeting it will increase to £5.
Tesco’s 27% market share remains the strongest despite competition from German discounters Aldi and Lidl.
Tesco’s billions of dollars in profits during a cost-of-living crisis have been criticized.
Sharon Graham, general secretary of Unite, described them as “another example of excessive profiteering fueled by astounding corporate greed.”
She stated, “Rampant profiteering drives inflation and exacerbates the cost of living crisis for workers and their families.”
“How is it possible that at a time when millions of people are struggling to feed their families, the largest supermarket in Britain is profiting more than ever before?”
