Tesco is pushing suppliers to cut prices to boost competitiveness

Tesco, the UK supermarket, relies on suppliers to cut costs and cut prices faster than rivals. Tesco reportedly met with a group of suppliers on Thursday and made clear it wanted to lead the cut because it believed“The market will shift from inflation to deflation”. Tesco stressed in its communications with suppliers that wholesale electricity prices had fallen by 50 per cent, plastic PET packaging prices had fallen by 22 per cent and freight rates had plummeted by 84 per cent. As Tesco reviews its range of fresh and packaged foods, the pressure on suppliers comes as well. A spokeswoman for the company told the media: “We are stepping up our efforts to work with suppliers to minimise the impact of inflation, especially as prices for some goods and inputs start to fall. When we see opportunities to pass on the cost savings to our customers, we take them.” British supermarkets, facing allegations of profiteering, were summoned at the end of last month to explain to mps why their prices were still rising. Muche Iza, owner of Asda, a leading supermarket, was this week asked to answer questions about his fuel pricing to members of Congress. Iza wrote to members of Congress before the meeting that he expected food inflation to ease further as the summer planting progresses. However, he warned that fixed-term contracts meant it would take three to nine months for price falls to reach consumers