CEO Ken Murphy claims Tesco is “more competitive than [it’s] ever been, from a value point of view”, as the retailer returned to volume growth in the second half of the year.

Reporting its preliminary results for the year ending 24 February today (10 April), Tesco saw sales grow 7.2% year-over-year to £61.48bn. While in recent months the inflationary environment drove sales growth via higher prices, the retailer reported positive volume growth in the second half of the year.

Tesco also touted its competitiveness. The supermarket saw value market share (how much was spent) increase by 28 basis points and its volume share (how many items were bought) rise by eight basis points.

Murphy, speaking to media this morning, expressed confidence in Tesco’s ability to win market share. The supermarket has been taking share from premium retailers for 19 consecutive periods, he claimed. The Tesco CEO credited the premium own-label Finest range in helping the retailer win this share, adding that Tesco Finest is now a “£2bn brand” in its own right.

As well as taking share from the premium retailers, Murphy also highlighted that Tesco is cheaper than Asda.
“We’ve never been cheaper than Asda in our history, but we’ve been consistently so for 16 months,” he said.
While Murphy and his team are confident in their current offering, given the competitiveness of the supermarket sector, complacency isn’t an option.
“We feel quite good about where we’re at, at the moment, but you really can’t take your eye off the ball for a day,” Murphy said.
He reported Tesco has seen some “resurgence” from Morrisons under its new leadership, adding he expects the competition to “ebb and flow” without letting up.

“One of the characteristics of anybody in grocery retail is a healthy dose of paranoia, because we’re in such an intensely competitive environment. We see threats from all sorts of angles,” Murphy stated.

Standing out on value
According to Tesco, the supermarket is at its most competitive ever on value, having achieved this through a “unique customer offer”, combining its Aldi Price Match initiative, Clubcard Prices (which give members access to exclusive deals) and Low Everyday Prices (which signposts value offers on brands).
The retailer is “doubling down” on these initiatives, with Murphy stating “consistency” will help Tesco win share going forward. However, for each of these initiatives, there are rival versions.

All the traditional ‘Big Four’ (Tesco, Sainsbury’s, Asda, Morrisons) price match to Aldi, with Asda and Morrisons price matching to both Lidl and Aldi. Sainsbury’s and Morrisons, as well as fellow grocer Co-op, also have exclusive deals for loyalty members.
Just last week, Sainsbury’s introduced its own ‘Low Everyday Prices’ initiative, which operates very similarly to Tesco.

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