Tesco said sales have fallen in its UK stores in recent weeks as its customers face “unprecedented increases in the cost of living”.
The UK’s largest supermarket said it had gained market share, but sales for the three months to May 28 fell 1.5% from the same period last year when the UK was closed. .
Ken Murphy, CEO of Tesco, said: “The market environment is still incredibly challenging.”
He said it was difficult to separate the significant impact of last year’s coronavirus blockages from other influences on buyers, but said Tesco was seeing “some early signs of changing customer behavior as a result of the inflationary environment “.
He said: “Customers are facing unprecedented increases in the cost of living, so it is even more important that we work with our supplier partners to mitigate as much inflation as possible.”
Tesco said sales of clothing and general merchandise, such as household items and toys, were hardest hit, while online sales were also hit when shoppers returned to supermarkets. He said the drop in the volume of goods sold was partly offset by inflation.
Sales in the Republic of Ireland fell 2.4%, but rose 2% overall due to strong growth in Central Europe and its Booker wholesale chain.
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The retailer’s comments come after more than one in five (22%) survey respondents said they skipped a meal or reduced the size of their meals because they couldn’t afford to buy. food.
Store prices rose in May to the fastest pace in more than a decade, according to British Retail Consortium and NielsenIQ figures. Food inflation rose to 4.3% in May from 3.5% in April, the highest since April 2012.
On Thursday, the Bank of England warned that the global annual rate of consumer inflation could rise above 11% in October. Inflation is already at 9%, the highest in 40 years.