Shoppers pay more as Tesco rakes in £1bn profit
People paid more for less in Tesco last year as the business made £1 billion profit despite soaring food prices.
The supermarket said it made a billion before tax in the 12 months to the end of February.
But the profit was less than half of the more than £2 billion it made a year earlier with the business trying to remain competitive by jacking up prices at a slower rate than some of its competitors.
Tesco said sales - the value of the products and services it sells to customers - rose by 7.2 per cent to £65.8 billion even as the amount of product it sold fell.
This is because even as the supermarket sold less, it charged more per product on average - although it did not reveal how much prices have gone up for shoppers.
Controlling prices has been key for Tesco; it wants to be seen as a better option for customers during the cost-ofliving crisis, analysts say.
Just a day before announcing its billion-pound profit, the business said it would cut milk prices, making it the first supermarket to do so for three years.
The power of Tesco as the biggest supermarket in the UK means it has been able to negotiate better contracts with its suppliers.
It means it has been able to increase prices at a slower rate than many of its competitors, or ‘inflate behind the market’ as Tesco called it.
But Sue Davies, the head of food policy at Which?, said the business's profits mean it could be doing more to help shoppers.
‘These results show Tesco is doing very well during the cost-of-living crisis while millions of its customers struggle to put food on the table due to soaring grocery price inflation,’ she said.