Tesco chief executive Ken Murphy has said that it is currently too early to tell what effect the growing cost of living crisis will have on shopper behaviour, adding that the retailer will be "watching what happens over the summer" very closely.
Murphy was commenting following the publication of Tesco's first-quarter results, in which the group reported a 2.0% increase in like-for-like sales in the period to 28 May, and a 1.5% like-for-like decline in its core UK retail operation.
Earlier this week, IGD suggested that food price inflation in the UK could reach as high as 15% in the coming months.
Commenting on Tesco's results, Murphy noted that the retailer has seen some changes in shopper habits, such as trading down to own brand in staple categories such as bread and pasta, but has also taken care not to 'overanalyse' these shifts.
"The tricky thing for us is to separate from those changes from what I would describe as normalising behavior post pandemic," Murphy commented.
"We are seeing higher frequency shopping trips. We are seeing basket sizes coming down a little bit. We have seen our convenience business getting even stronger, and we are seeing some early signs of customers trading down in those areas where we've seen significant cost price pressure."
He also cited a number of other "distorting effects" that may have played a role during the period, including the fact that Easter took place earlier this year, as well as the recent Platinum Jubilee weekend.
In terms of the level to which shoppers were shifting to private-label brands, Murphy said that the mix effect was "less than 1%", however this may change over the coming months.
"We're not talking about dramatic shifts," he said. "So, I wouldn't over-read into it at this stage. I think the best thing we can do is watch what happens over the summer."
As to how long he sees the current period of inflationary period lasting, Murphy described the current situation as "multi-dimensional", and therefore difficult to quantify.
"It depends on volume demand," he said. "It depends on weather related crops and commodity prices. It depends on energy prices. There are a lot of factors that are influencing inflation and cost price increases, and so we can't really give any visibility.
"All I can tell you is that we're doubling down on our commitment to provide value to customers. We're going to be working incredibly closely with our suppliers and mitigate whatever costs we can to improve our efficiency to simplify our supply chain."