Farmers who supply to Tesco will undoubtedly be left questioning the supermarket’s bumper profits for the past year after declaring an operating profit of £2.3 billion, up from £882m the previous year.
In its latest set of results published this week, figures revealed that sales rose by 4.4% to £68.2 billion in the year to February 2024.
While there are already huge concerns over food security and poor returns for producers that are failing to match cost of production increases, NFU Scotland has said it plans to meet Tesco shortly to discuss fairness for all parts of the supply chain.
Tesco sales soar to £68.2 billion
NFUS chief executive John Davidson said: “Tesco continues to be one of Scottish agriculture’s largest customers and its strong sales performance illustrates the keen demand and growing potential for locally produced food.
“However, the three-fold increase in its profits is something that farmers and crofters can only dream about in the current economic climate and those that supply Tesco are certainly not benefitting to anything like that extent from these increased returns.
“It is absolutely vital that farmers and crofters are paid a fair return for the quality food and drink they work tirelessly to produce and the suggestion from Tesco that it must find further savings across its products is an ominous sign for the industry.”
‘Suppliers are not benefitting to anything like that extent’ says NFUS chief
Mr Davidson said following the union’s publication of its ShelfWatch results at the conference in February, NFUS has contacted all major retailers requesting a meeting to discuss how they can better support produce.
“We have plans to meet with Tesco shortly to discuss our ShelfWatch findings and we will look to discuss the need for all parts of the chain to share in the risk and reward and what Tesco can do to deliver a more sustainable and profitable future for farmers and crofters.”
Meanwhile, Tesco’s chief executive Ken Murphy, said the company has worked hard to reduce prices and that Tesco has now been the cheapest full-line grocer for well over a year.
Scotland’s union will meet with Tesco to discuss fairness across supply chain
“Inflationary pressures have lessened substantially, however we are conscious that things are still difficult for many customers,” said Mr Murphy.
“We have continued to invest in helping customers where it matters most, cutting prices on more than 4,000 products and doubling down on our powerful combination of Aldi Price Match, Low Everyday Prices and Clubcard Prices.
“Customer perception of the quality of our products is growing ahead of the market and we continue to win customers from premium retailers, with sales of Tesco Finest now exceeding £2 billion.”
Tesco has more than 330,000 employees and a 27.3% share of the grocery market.
