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“We’re not sure it’s peaked just yet,” Murphy said in response to a question on inflation. “We would hope that by the middle of the year it will have peaked and then we will see it come down the other side.”
Britain’s consumer price inflation rate hit a 41-year high of 11.1% in October but eased off to 10.7% in November. The Bank of England thinks it will slow to about 5% by late 2023.
Like most other industries, retailers have been grappling with rising costs while customers are cutting down on spending due to surging inflation, also hampering earnings.
Still, Tesco reported strong Christmas sales as families hosted larger gatherings during the holiday season after two years of pandemic curbs, and treated themselves while at home rather than going out to save cash.
“We are more focused this January on value because we think that’s what’s important to customers. That said, the performance is pretty good and in line with our expectations,” Murphy said.
