London Daily

Focus on the big picture.
Saturday, Jul 12, 2025

Tesco warns of 'unprecedented' inflation but drops price of milk

Tesco warns of 'unprecedented' inflation but drops price of milk

The cost of a pint of milk has fallen from 95p to 90p at Tesco as home delivery costs are due rise.
The impacts of higher prices are being felt in the Tesco boardroom as profits have fallen despite an increase in sales.

High energy and labour costs, along with food inflation at 17.5%, have hurt the company's earning power.

But the retailer also announced a reduction in the price of milk for the first time since May 2020. The cost has dropped from 95p to 90p a pint and from £1.30 to £1.25 for two pints. Prices on more than 1,000 everyday items will be frozen until early July.

The chain also announced it will buy back another £750m worth of shares in addition to the £1bn it has already bought back.

It reported profits of £2.63bn, down from £2.82bn the year before despite revenues rising to £65.7bn over the year, an increase from £61.3bn a year ago.

"Our results reflect our continued investment in delivering great value and quality for our customers, whilst at the same time looking after our colleagues," chief executive Ken Murphy said.

"This is despite unprecedented levels of inflation in the prices we have paid our suppliers for their products, and the cost of running our own operations."

At the same time Tesco's preliminary full-year results said it is "at the most competitive we have ever been" and Tesco prices were "meaningfully lower" than 17.5% food inflation rate.

Mr Murphy also said inflation would fall later this year, as oil and grain prices fall, but the price of rice and protein would stay high.

The retailer is pushing suppliers for price cuts and has a team to closely monitor the costs facing suppliers, The Sunday Times reported on Sunday.

In an effort to save £1bn by February 2024 hundreds of manager roles across shops have been cut and all remaining food counters and hot delis have been closed.

Increases in delivery costs are to be introduced. Both the minimum spend and the fee for ordering groceries online will rise from 2 May.

A £4 charge is applied when the £40 home delivery minimum spend threshold isn't reached. The minimum spend will rise to £50 next month and the fee for not meeting it will top £5.

Tesco still enjoys a 27% market share, the largest of any supermarket, despite increasing competition from low-cost German retailers Aldi and Lidl.

The billions of profits made by Tesco in a cost of living crisis have come in for criticism.

Unite general secretary Sharon Graham said they are "another example of excessive profiteering fired up by astonishing corporate greed".

"It's this rampant profiteering which is driving inflation, and cranking up the cost of living crisis for workers and their families," she said.

"How can it be that at a time when millions are struggling to feed their families Britain's biggest supermarket is profiteering as never before."
Newsletter

Related Articles

0:00
0:00
Close
Reparations argument crushed
Rainmaker CEO Says Cloud Seeding Paused Before Deadly Texas Floods
A 92-year-old woman, who felt she doesn't belong in a nursing home, escaped the death-camp by climbing a gate nearly 8 ft tall
French Journalist Acquitted in Controversial Case Involving Brigitte Macron
Elon Musk’s xAI Targets $200 Billion Valuation in New Fundraising Round
Kraft Heinz Considers Splitting Off Grocery Division Amid Strategic Review
Trump Proposes Supplying Arms to Ukraine Through NATO Allies
EU Proposes New Tax on Large Companies to Boost Budget
Trump Imposes 35% Tariffs on Canadian Imports Amid Trade Tensions
Junior Doctors in the UK Prepare for Five-Day Strike Over Pay Disputes
US Opens First Rare Earth Mine in Over 70 Years in Wyoming
Kurdistan Workers Party Takes Symbolic Step Towards Peace in Northern Iraq
Bitcoin Reaches New Milestone of $116,000
Biden’s Doctor Pleads the Fifth to Avoid Self-Incrimination on President’s Medical Fitness
Grok Chatbot Faces International Backlash for Antisemitic Content
Severe Heatwave Claims 2,300 Lives Across Europe
NVIDIA Achieves Historic Milestone as First Company Valued at $4 Trillion
Declining Beer Consumption Signals Cultural Shift in Germany
Linda Yaccarino Steps Down as CEO of X After Two Years
US Imposes New Tariffs on Brazilian Exports Amid Political Tensions
Azerbaijan and Armenia are on the brink of a historic peace deal.
Emails Leaked: How Passenger Luggage Became a Side Income for Airport Workers
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Weinstein Victim’s Lawyer Says MeToo Movement Still Strong
U.S. Enacts Sweeping Tax and Spending Legislation Amid Trade Policy Shifts
Football Mourns as Diogo Jota and Brother André Silva Laid to Rest in Portugal
Labour Expected to Withdraw Support for Special Needs Funding Model
Leaked Audio Reveals Tory Aide Defending DEI Record
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
London Stock Exchange Faces Historic Low in Initial Public Offerings
A new online platform has emerged in the United Kingdom, specifically targeting Muslim men seeking virgin brides
Trump Celebrates Independence Day with B-2 Flyover and Signs Controversial Legislation
Boris Johnson Urges Conservatives to Ignore Farage
SNP Ordered to Update Single-Sex Space Guidance Within Days
Starmer Set to Reject Calls for Wealth Taxes
Stolen Century-Old Rolls-Royce Recovered After Hotel Theft
Macron Presses Starmer to Recognise Palestinian State
Labour Delayed Palestine Action Ban Over Riot Concerns
Swinney’s Tax Comments ‘Offensive to Scots’, Say Tories
High Street Retailers to Enforce Bans on Serial Shoplifters
Music Banned by Henry VIII to Be Performed After 500 Years
Steve Coogan Says Working Class Is Being ‘Ethnically Cleansed’
Home Office Admits Uncertainty Over Visa Overstayer Numbers
JD Vance Questions Mandelson Over Reform Party’s Rising Popularity
Macron to Receive Windsor Carriage Ride in Royal Gesture
Labour Accused of ‘Hammering’ Scots During First Year in Power
BBC Head of Music Stood Down Amid Bob Vylan Controversy
Corbyn Eyes Hard-Left Challenge to Starmer’s Leadership
London Tube Trains Suspended After Major Fire Erupts Nearby
×