Tesco said he expects to make lower profits this year in the middle of an increasing price war the main supermarkets of the United Kingdom.
The largest grocer in the United Kingdom has provided profits between 2.7 billion pounds sterling and 3 billion pounds sterling, compared to 3.1 billion pounds sterling for the exercise that has just ended.
The head of management, Ken Murphy, said that the prediction of lower profits would give Tesco “flexibility and fire power to maintain our position on the market” due to increased competition.
The company’s share price plunged last month after ASDA launched large price reductions to try to restore its fortune.
Tesco said it was more competitive than ever, but in recent months, he had experienced an “additional increase in the competitive intensity of the British market”.
He said that if the benefits are falling, this would likely reflect an additional increase in “competitive intensity” in the British market.
Before Update of Tesco’s results on Thursday, analysts had foreseen profits from 3.2 billion pounds Sterling on average.
The supermarket said it was determined to offer customers the best value.
“We see other opportunities to protect and strengthen our competitiveness,” he said.
Analysts previously doubted the drop in ASDA prices will arouse a price war.
But Richard Lim, director general of Retail Economics, said that there were “certainly signals on the market” that a price war was in sight.
He said the supermarkets were engaged in these battles in previous years. “And we live in an incredibly competitive sector with regard to the grocery sector, so the price and value are always the key determinant that pushes consumers through the doors of supermarkets,” he said on the BBC Today program.
Tesco, like its competitors, faces an increase in costs due to the increase in national insurance and the minimum wage. The company said its or Bill increased 235 million pounds sterling.
Mr. Murphy said that despite the fears of American prices that slow down inflation, he did not think that the impact would be “significant for Tesco”, declaring that the supermarket obtains a large part of its United Kingdom products.
