Tesco says 'uncertainty' caused by Middle East war is weighing on outlook for the year
The boss of Tesco has said it is ‘doing whatever we can’ to keep food prices down as the war in the Middle East creates ‘further uncertainty' in its outlook for the year. Britain's largest supermarket reported stronger-than-expected profits in the year to 28 February, the first day of the Iran war. Adjusted operating profits came in at £3.1billion, beating forecasts of between £2.9billion and £3.1billion. But Tesco said it is providing a ‘wider range of guidance than we were previously planning’ due to ‘the increased uncertainty’ caused by the war - predicting adjusted operating profit of between £3billion and £3.3billion. Boss Ken Murphy said: 'We are committed to doing whatever we can to help keep down the cost of the weekly shop, and with the conflict in the Middle East creating further uncertainty for consumers and the economy more broadly, that commitment matters more than ever.'He added: ‘Much will depend upon the duration of the conflict and in particular, the potential implications for UK households and the economy more broadly.' Tesco has warned of uncertainty caused by the Middle East war on its outlook for the year And Murphy downplayed fears over food shortages and said he could not predict what would happen with price increases.The Food and Drink Federation has warned that food inflation could hit 10 per cent by the end of the year as supply chain disruption and higher fuel costs weigh on producers.Murphy said Tesco had not yet seen any ‘meaningful’ increases in the supply chain as of yet, apart from cost increases to fuel, and he did not want to ‘speculate’ on when price rises could filter through to tills.His comments come as The Times reports that the Government is concerned Britain could face shortages of products - including chicken and pork - this summer if the war continues.The Government has prepared contingency plans for a ‘reasonable worst-case scenario’ should shortages of carbon dioxide hit manufacturers.‘We are not flagging any issues in our supply chain at this point,’ Murphy insisted.He added: ‘We're in constant contact with the government in various guises and through various departments to help them with that scenario planning. So I think they're doing the right thing.’He said there had not been any 'meaningful change' in customer behaviour since the outbreak of the war, but trends such as shoppers wanting to eat healthier and dine at home instead of restaurants are continuing. ‘Don't forget, we're four years into a cost of living crisis, so it's been something that's been an ongoing capability,’ he said.And Murphy said the supermarket had built on its position as Britain’s biggest supermarket ‘despite an increase in competitive intensity’ over the past year.Tesco sales rose 4.6 per cent to £66.6billion, while free cash flow rose 11.8 per cent to £2billion, as it continued to poach customers from rivals 'despite cost pressures from new regulation.' DIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you
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Tesco says 'uncertainty' caused by Middle East war is weighing on outlook for the year
