Tesco Chief Warns Suppliers Not To Hike Prices
Tesco CEO Dave Lewis has told multinational suppliers not to raise praises to boost results and take advantage of a weak pound, Reuters reported Thursday.
Lewis spoke with reporters during a briefing at Tesco's headquarters at Welwyn Garden City, north of London.
Multinationals deliver results using constant and current exchange rates, Lewis said. Investors understand that it is a result of the volatility of markets and won't drop stock prices, he added.
"The only thing we would ask of companies that are in that position is they don't ask UK customers to pay inflated prices in order that their reporting currency is maintained. They don't do that for countries outside of the UK," he said.
Tesco had already fought with Unilever over who should take the hit for the dipping currency, resulting in the feud Marmitegate. Tesco removed some of Unilever's products from its website in retaliation for a 10% price raise on the salty spread.
The pound has had a precipitous 16% drop against the American dollar since the Brexit vote, making imports more expensive, Reuters said.
Tesco has managed to keep growing despite the slowdown, with a 2.2% increase in sales over the 12 weeks ending November 6, while rival discounters Lidl and Aldi's growth has decelerated.
Sainsbury's CEO Mike Coupe put out a similar plea to suppliers last week. The company's like-for-like sales dropped 1% in the last quarter.
© 2016 European Supermarket Magazine – your source for the latest retail news. Article by Karen Henderson. To subscribe to ESM: The European Supermarket Magazine, click here.