Tesco chief executive Sir Terry Leahy said this week that trading conditions are becoming more difficult and shoppers are seeking out discount products.
Leahy said “the pressure is on price more than ever” and as a result the company’s discount range sales are up 65% year-on-year.
He added a quarter of consumers are buying items from Tesco’s discount and budget ranges.
Additionally, Leahy warned suppliers that they will have to bring down prices as consumers demand cheaper products in harsh economic times.
He said: “We want to ensure that all our suppliers understand this, which is why we are going to great lengths to talk to them about the new pressures consumers are under.”
But Tesco denied it is getting ready for a new round of negotiations with suppliers.
Leahy also continued to oppose the supermarket ombudsman, saying: “Why hamper a highly competitive industry that the [Competition] Commission itself acknowledged delivers value, choice, innovation and convenience?”
A recent survey carried out by Traidcraft and the Cross Cutting Group found over 80% of consumers want to see the introduction of a supermarket watchdog.
