London Daily

Focus on the big picture.
Tuesday, Sep 15, 2026

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
HMRC Warns Nearly Seven Million Adults Are Unclear About State Pension Entitlements
UK Parliament Passes Sovereign Grant Reform Before Conference Recess
British Rail Passengers Gain Automatic Right to Switch Operators During Disruptions
Burnham Hosts Downing Street Business Summit as UK Fiscal Pressure Builds
Labour Government Moves to Challenge £72 Million in Reform UK Crypto Donations
UK Advertising Industry Warns Wider Junk Food Rules Could Put £1 Billion in Media Spending at Risk
Cornwall Opens Devolution Talks With UK Government Over Transport and Local Services
UK Parliament Considers Sovereign Grant Reform Setting Royal Funding at £99.9 Million
Trades Union Congress Calls for Income-Based Energy Tariff Funded by Higher Bank Levy
UK Prime Minister Rejects Second Scottish Independence Referendum
House of Lords Begins Scrutiny of Bill to Lower UK Voting Age to 16
Anthropic Says Claude Was Exploited in Weapons-Related and State-Linked Cyber Activity
Institute of Directors Urges UK Government to Avoid Business Tax Increases in Autumn Budget
Rising Gilt Yields Cut UK Fiscal Headroom to About £13 Billion Ahead of Budget
UK Economy Grows 0.4% in July as Services and Technology Activity Strengthen
UK Government Promises Clearer Student Loan Guidance After Repayment Backlash
Charities Warn Unpaid Carers May Die Before Receiving Government Compensation
Dover Unrest Prompts Review of UK Counter-Extremism Strategy
Celtic Summit Leaders Reassert Right to Pursue Independence From UK
NHS Records Busiest Summer on Record Amid Severe Heatwaves
Harrods Faces Potential £150 Million Compensation Bill Over Al Fayed Abuse Claims
UK Parliament Opens Debate on Landmark Assisted Dying Legislation
Metropolitan Police Investigate Reform UK Over Alleged Foreign Electoral Donations
UK Economy Expands 0.4% in July as AI Investment Boosts Activity
Bank of England Signals Caution on Rates as Inflation Pressures Persist
Tesco Alerts Police After Scammers Use Its Branding in AI-Generated Fraud
Lindy Cameron Appointed First Female Permanent Under-Secretary at UK Foreign Office
UK Government to Rewrite Student Loan Guidance After Mis-Selling Criticism
Welsh First Minister Warns Andy Burnham Government to Respect Devolution
Trump’s Falkland Islands Remarks Trigger New Diplomatic Tension With Britain
Reform UK Receives Record £72 Million Donation From Cryptocurrency Billionaires
UK Bans Imports From Israeli West Bank Settlements and Sanctions Supporting Institutions
Bayeux Tapestry Draws Large Crowds at British Museum
Cuts to International Aid Raise Concerns Over Fragile Overseas Health Systems
UK Airlines and Logistics Operators Adjust Capacity as Fuel Costs Rise
UK Mortgage Arrears Edge Lower in Second Quarter
UK Government Advances New Devolution Offers for English Councils
UK Parliament Begins Debate on NHS Governance and Single Patient Record Reforms
Andy Burnham Launches Number 10 North Devolution Initiative
UK Parliament Rejects Assisted Dying Bill for Terminally Ill Adults
UK Bans Goods From Israeli Settlements in the Occupied West Bank
UK Economy Grows 0.4% in July as Technology Services Strengthen
Metropolitan Police Continue Investigation Into Reform UK Political Financing
Chinese Crypto Entrepreneur Leon Li Identified as Seller of £190 Million London Mansion
Trades Union Congress Proposes Social Energy Tariff Funded by Higher Bank Surcharge
British Chambers of Commerce Calls for State Pension Triple Lock to Be Scrapped
Anthropic Says Claude Helped Disrupt Biological Weapons and Cyber Espionage Threats
UK Imposes Sanctions Over Israeli Settlements and West Bank Violence
UK Reimposes Sectoral Sanctions on Iran’s Aviation, Shipping and Energy Networks
UK Economy Grows 0.4% in July as AI and Programming Services Lift Activity
×