Tesco chief hails ‘encouraging’ signs that inflationary pressures are easing

Tesco chief executive Ken Murphy said there were “encouraging” signs that the inflationary pressures facing Britain’s biggest supermarket chain were easing as the group reported an 8 per cent increase in quarterly sales.

In a trading update on Friday, the company said large stores had performed particularly well, with like-for-like sales up 9.9 per cent, while online sales rose 8.2 per cent. Overall sales climbed 8 per cent to £14.8bn in the past three months.

Tesco said it had benefited from shoppers switching from upmarket retailers as it expanded its Finest range. Customers have been trading down to reduce living costs.

There were “encouraging early signs that inflation is starting to ease across the market”, Murphy said.

The company still expects to deliver broadly flat retail adjusted operating profit, its preferred profit measure, this financial year. It made £2.5bn last year.