As several industries around the world deal with elevated fuel prices due to the ongoing war in Iran, Ken Murphy, the CEO of retail chain Tesco, has called on the U.K. government to help keep prices low for consumers.
“In terms of tax pressures, industry and energy in particular, anything the government can do to help us keep prices low for customers is welcome,” Murphy said, per The Times, adding that the war in Iran is “creating further uncertainty for consumers and the economy more broadly.”
Murphy’s call comes as inflationary forecasts have risen, with Food and Drink Federation CEO Karen Betts warning that war in the Middle East is starting to push up manufacturing costs.
“Manufacturers will work hard to protect consumers from price rises, but even under an optimistic scenario, our forecast is that food inflation will reach at least 9 percent by December,” Betts said.
She added that her organization is “engaging government to ensure they are acting to reduce costs where possible for food and drink manufacturers to mitigate the impact of rising food prices on inflation.”
Internally, Murphy emphasized that Tesco would continue to do everything in its power to minimize the impact of potential inflation on consumers amid the spike in energy and commodity prices.
Though the retailer has yet to see meaningful issues in its supply chain or any “meaningful changes in customer behavioral patterns as a consequence of the conflict so far,” Murphy said the situation remains unpredictable and Tesco needs to be prepared for several outcomes.
“It’s impossible to speculate, and it would be wrong for me to throw a number out there or a [timeline] because I think that it all depends on the duration of this conflict and the impact it has on energy pricing in general,” Murphy said. “We don’t know what it’s going to look like because clearly this is a very volatile, unpredictable situation.”
Amid the spike in prices, Tesco reported a 4.6 percent increase in sales for fiscal year 2025-26 and has increased the forecast for its annual adjusted operating profit for 2026-27. The retailer is now expected to bring in between GBP 3 billion and GBP 3.3 billion (USD 4.1 billion and USD 4.7 billion, EUR 3.4 billion and EUR 3.8 billion) in operating profit in the current fiscal year, compared to GBP 3.15 billion (USD 4.3 billion, EUR 3.6 billion).
That total, however, may fluctuate again depending on the duration of the war and its ripple effects on U.K. household spending and the broader economy, Murphy added as a caveat.
“Over the last year, despite cost pressures from new regulation, we have increased our investments in keeping prices low, further improving quality and offering even better service,” Murphy said.
As part of those measures, the company tripled the number of products put on the shelves for Everyday Low Prices to 3,000, running alongside over 10,000 Clubcard Prices and more than 600 Aldi Price Match lines.
“We have also continued to invest in quality and innovation, with over 2,000 new and improved products across the year,” Murphy said.
