Tesco is luring customers away from rivals Waitrose and Marks & Spencer as shoppers look for cheaper alternatives.
The country’s largest supermarket said the sales of products in its premium Finest range surged 15 per cent over the 13 weeks ending May 27.
Boss Ken Murphy said top-end products – such as an £8 mix-and-match picnic and deli offer or desserts such as Eton Mess – were wooing cash-strapped customers away from more expensive retailers.
Customers have been whacked with painful increases to their shopping and energy bills, making many of them switch to cheaper rivals.
The cost-of-living squeeze has also caused families to swap dining out for spending a bit more on more indulgent dishes they can make at home.
Driving force: Tesco said the sales of products in its premium Finest range surged 15 per cent over the 13 weeks ending May 27
‘We’ve made further progress in developing our Finest offer, launching 126 new products, with nearly 70 in our barbecue and picnic ranges, including summer-inspired sweet treats and chilled desserts,’ Murphy said.
‘The recent launch of our Finest signature vegetable dishes is a great example of increased focus on innovation, health, and convenience and, of course, fantastic tasting food that our reinvigorated product team is delivering.’ Danni Hewson, head of financial analysis at the investment platform AJ Bell, said: ‘Cash is tight but people still want to treat themselves.
‘Tesco made a huge effort to create more tasty products to tempt shoppers to stretch a little further and the fact they can nab club-card points at the same time is a boon.
‘It’s not all about price, it’s also about quality, and Tesco has worked hard to push its Finest range into shoppers’ consciousness and to innovate the kind of products that Marks & Spencer and Waitrose have been so successful in bringing to market.’
The FTSE 100 supermarket said UK sales rose 9 per cent in the first quarter. The business hailed ‘encouraging early signs that inflation is starting to ease across the market’.
Murphy said: ‘We are very conscious that many of our customers continue to face significant cost-of-living pressures and we have led the way in cutting prices on everyday essential items.’
The supermarket’s boss also batted away criticism that the company had profited from the cost-of-living crisis with unreasonable price hikes.
As prices of commodities such as milk, bread and pasta drop, Tesco had cut its own prices, Murphy said, arguing it was unfair for the Bank of England to blame grocers for high inflation.
He added: ‘We react pretty quickly when we see those commodities come down.’
Tesco shares fell 0.6 per cent, or 1.6p, to 262.9p.
