Now supermarket boss must prove he’s worth £4.7m
As recently as April Tesco was reporting few signs of change in its customers’ shopping habits. Today the language has hardened, now the evidence of trading down is there for all to see.
But we are still only at the early stages of the great cost of living surge. Yesterday economists at the Bank of England once again raised its forecast for the inflation peak to 11% in October. Who knows if that will prove any more accurate than previous stabs at it? Also the Institute of Grocery Distribution (IGD) warned of food prices rising at a truly alarming 15% by the summer.
What we can be sure of is Tesco will wheel out all the weapons in its formidable armoury to defend its market share and keep the German discounters at bay.
CEO Ken Murphy today mentioned three — Aldi Price Match, Low Everyday Prices and Clubcard Prices — but also hinted suppliers will have to take some of the pain to keep shop prices low.
One form of rampant inflation that has been with us for a long time is in boardroom pay. Last year Murphy was rewarded with a package worth £4.7 million, including a £3.2 million bonus.
No one would ever argue that running a business the size and complexity of Tesco in a market as competitive as UK food retailing is ever a walk in the park. But those are really huge numbers at a time when his customers and staff are feeling the pinch.
Tesco came through the pandemic with credit in the bank. It now faces a new challenge. It is up to Murphy to prove that, in the words of the L’Oréal ad, he is worth it.