Tesco is leaning on suppliers to pass on cost savings as it strives to cut prices faster than its rivals.
The grocery giant met suppliers on Thursday and made clear that it wanted to lead the way on price cuts as it described the market as moving “from inflation to deflation”, according to The Sunday Times.
The grocer highlighted the 50% drop in wholesale electricity prices, a 22% in plastic PET packaging prices and a 84% plummet in freight costs, within its presentation to suppliers.
The pressure on suppliers comes as Tesco reviews its fresh and packaged food ranges.
A spokeswoman for the grocer told the newspaper: “We’re working … with suppliers to mitigate the impact of inflation as much as we can, particularly as some commodity and input prices begin to fall. When we see opportunities to pass on savings to customers, we’ll take them.“
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Tesco’s supplier push comes as supermarkets have faced accusations of profiteering and were hauled in front of MPs late last month to explain why their prices were still rising.
Asda boss Mohsin Issa has been called to appear in front of MPs this week as they demand answers about its fuel pricing.
Issa has written to MPS ahead of the session to say he expects food inflation to ease further during the summer growing season.
However, he warned that fixed-term contracts mean it will take three to nine months for falling prices to feed through to consumers.
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