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TESCO SHOPPERS SWITCHING FROM FRESH TO FROZEN FOOD

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Media caption,

'Inevitable' people will spend less this Christmas - Tesco

By Michael Race
Business reporter, BBC News


Households are switching from buying fresh food to cheaper frozen goods as the
cost of living bites into budgets, the boss of Tesco has said.

Ken Murphy, chief executive of the UK's largest supermarket, said some shoppers
were also swapping pricier red meat for cheaper white protein to save money.

He added that people were using barcode scanners more when shopping to avoid
being "embarrassed" at the tills.

Food prices are rising at their fastest rate for 45 years.

In an interview with the BBC, Mr Murphy said shoppers were "managing their
budgets much more tightly" and had changed their behaviour by "trading down" to
cheaper food and own brand products.

Other examples he said included seeking out cheaper frozen meat and vegetables
instead of fresh produce, batch cooking meals and cutting back on eating out.



The Tesco boss said the hand-held barcode scanners allowed people to "keep to a
specific budget" by being able to keep an eye on the running total, instead of
being "worried about being embarrassed at the till" if it turned out they could
not afford their shopping or were over budget.

The hand-held scanners allow shoppers to scan the barcodes on food and other
goods as they pick it up - and keep an eye on the running total - instead of
waiting until the checkout and potentially discovering they cannot afford their
groceries.

Tesco said it has sold double the number of frozen turkeys this year compared to
the amount in 2019, due to shoppers cutting back.

There has also been a huge spike in luxury frozen desserts, and searches for
frozen food in general on Tesco's website are up 40% from last year.

Image source, Getty Images

Mr Murphy said that the UK was living in "times of turbulence and times of
change" and people were worried about the "affordability of life today".

 * Why are prices rising so much?

But he said he believed customers were "really determined to enjoy Christmas
this year", with 2022 being the first festive period for three years without
Covid restrictions.



He said shoppers had been spreading out the cost of Christmas by purchasing
goods earlier and had also bought "more modest gifts".

"People will spend less. That is inevitable," he said.

Latest official figures revealed food price inflation hit 16.2% in the year to
October, up from 14.5% in September.

Inflation is the rate at which prices are rising. To calculate it the Office for
National Statistics (ONS) keeps track of the prices of hundreds of everyday
items, known as a "basket of goods".

The ONS said that food prices had risen sharply in October with milk, pasta,
margarine, eggs and cereals all going up.

Higher electricity and gas bills have left many households facing hardship
heading into the festive season.



Asked when he thought food price inflation would slow down, Mr Murphy said it
depended on a "number of factors".

He said the global energy crisis was the main driver behind high food prices,
but added the squeeze on goods since the pandemic was having an impact, as well
as the pound's weakness against the US dollar.

Tesco has overhauled its "reduced to clear" line - which includes food
approaching its use-by date - and created "Reduced in Price, Just as Nice"
sections, which will be rolled out to 100 stores by the end of the year.

The supermarket has also launched its food collection drive in UK stores, asking
customers to buy items needed for food banks.


MORE ON THIS STORY

 * Why are prices rising so much?
   
   16 November
   
   

 * People watching every penny, says Tesco
   
   5 October
   
   

View comments


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