Tesco has bought in more turkeys this Christmas on the back of rising customer sentiment ahead of the festive period.
The grocery giant, which raised its profit outlook this morning on the back of soaring first half sales and profits, said its customers are feeling “more optimistic” than they were last year.
Murphy said: “I think people are determined to enjoy Christmas this year. We’re buying up on turkeys because we believe that people will want to celebrate more together and spend more time with friends and family.”
The Tesco boss said the impact of rising interest rates hadn’t been as bad as he feared.
“You’ve definitely got some people rolling off mortgages but less than you would have thought initially, and the new rates are also coming down,” he said.
“I’m sure that it will be challenging for a number of families, but overall we think the customer is in good shape for this Christmas.”
Despite this rosier consumer outlook, Murphy expects the cost-of-living crisis to remain a concern over the golden quarter.
“We’re committed to doing everything we can to drive down food bills to make sure that customers can have a fantastic and affordable Christmas by shopping with Tesco.”
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Inflation starts to ease at Tesco
Stabilising food prices have played their part in improving consumers’ outlook and Murphy vowed to “double down on [their] efforts to be even more competitive”.
The retailer said it had cut prices on around 2,500 products, saving customers an average of around 12%.
Although it said inflation had “come down progressively” over the past six months, Murphy still noted it in areas like chicken, meat and potatoes.
However, he said it had inflated behind the market.
“During the half we’ve consistently been the cheapest, the full-line grocer, and the price differential to the discounters also reached an all time low.”
There was also evidence that shoppers were splurging on “little treats”.
Murphy said that Tesco was making gains from more premium supermarkets such as Waitrose and M&S, and also from those opting to dine in rather than going out to pubs and restaurants.
“In our Finest range alone, we’ve launched 150 new products that have helped us to drive 13 consecutive periods of switching gains from the premium retailers.
“We’re seeing particularly strong growth in the dinner for tonight mission as shoppers look to treat themselves at home rather than eating out.”
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