LONDON (Reuters) – Tesco, Britain’s biggest retailer, is currently facing operating cost inflation of about 5%, its finance chief said on Thursday.
“When I look at operating costs, our costs to run the business, we typically would work with an inflation assumption of 2% to 3%. This time round I’m thinking that will probably be more close to 5%,” Chief Financial Officer, Imran Nawaz, told reporters after Tesco updated on Christmas trading.
He said Tesco would mitigate inflation for consumers through its cost saving programme.
“The key question that we’re working through for next (financial) year is which elements of the inflation that we’re seeing is transitory and which ones will persist and that will determine how much savings we need to be driving.”
Chief Executive Ken Murphy said inflation for consumers was about 1% in Tesco’s third quarter and over the Christmas period.
(Reporting by James Davey; editing by Michael Holden)