Tesco has made a point of saying how much it understands shoppers’ challenges amid the cost-of-living crisis, underpinning how “it’s been an incredibly tough year for many of our customers, and we have been determined to do everything we can to help”, said group chief executive Ken Murphy as the retail giant unveiled its results for the year to February 25, 2023.

As the UK’s biggest retailer said its pre-tax profits plunged 51 per cent to £1 billion for the year as it dealt with soaring costs, and pointed to adjusted operating profit, excluding petrol, being “broadly flat” in this financial year as it revealed profits fell 6.3% to £2.4bn in the year to February 25, the focus is firmly on what it is doing to make the weekly shop more affordable for its customers.

“Our results reflect our continued investment in delivering great value and quality for our customers, while at the same time looking after our colleagues,” Mr 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.”

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What does this mean for shoppers? The retail stalwart points to its “market-leading combination of Aldi Price Match, Clubcard Prices and Low Everyday Prices changing the way customers perceive value at Tesco”, with Mr Murphy noting: “We are the most competitive we have ever been.”

Mr Murphy also insists that Tesco has “fundamentally repositioned our value proposition” to help under-pressure customers and talks frequently of an “relentless focus on providing value”.

Indeed, the day before its results were announced, Tesco announced cut the price of its milk for the first time since May 2020, signalling that prices at the tills could ease. Reducing the price of a four-pint bottle from £1.65 to £1.55 may not seem significant – but “every little helps”, as its advertising slogan points out.

And it also points to its Low Everyday Prices model continuing to lock in the cost of over 1,000 everyday products until July 2023. These products cover a vast array of the things people buy every day, from groceries and household products to pet food.

Although it makes a big noise about its Tesco Clubcard, Clubcard points will be worth twice their value rather than the three times they are now when customers cash them in from June 14 this year.

Customers expressed their disappointment at this move when it was announced although Tesco says the change is to “make sure we can continue to provide you with a wide range of exciting rewards, while keeping our product prices low”.

But of the 20 million-plus Clubcard users, there will be some who will now question their loyalty to the retailer – and potentially turn to discounters like Aldi and Lidl.

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