Tesco eyes supplier price cuts in bid to lead supermarket deflation

Tesco is reportedly set to push suppliers for price cuts as it looks to pass on lower prices to consumers and drive down food price inflation, according to The Sunday Times. 

The outlet cited Ged Futter, director at The Retail Mind, who claimed Tesco is trying to “lead the supermarket industry on deflation”.

According to the latest figures from Kantar, grocery price inflation reached 17.5%, adding £837 to the average household’s annual bill, with prices rising fastest in eggs, milk and cheese.

Last month, Tesco reportedly backtracked after it faced criticism from its suppliers and farmers after they were informed of new fulfilment fees, which are to be imposed by the retailer on produce sold online. 

Under the plans it would have introduced Amazon-style fulfilment fees on goods sold online. Under the scheme, Tesco would charge a flat rate of between 5p and 12p for products sold through its website and app.

A Tesco spokesman told the Times: “We are committed to fair and transparent partnerships with our suppliers, and for seven consecutive years suppliers have voted us No 1 retailer in the independent Advantage survey. We are working hard to keep the cost of the weekly shop as affordable as possible.”