Shoppers buying frozen turkeys early amid Christmas supply fears, Tesco says

Shoppers are buying frozen turkeys early in a bid to avoid any potential disruption to their Christmas dinner, the boss of Tesco has said.

The supermarket giant said it was confident of good product availability for Christmas but there could still be “bumps in the road” amid supply chain challenges affecting the sector.

Tesco praised the “resilience of our supply chain” as it said it has already hired about 15,000 extra temporary staff as part of preparations for Christmas.

Ken Murphy, chief executive of Tesco, said that about 60% of the turkeys it sells each year are frozen but that this is likely to be higher this year.

“We currently have a 10% increase of turkeys and there is noticeably an elevated demand for frozen turkeys,” he said.

“We have a resilient supply chain and really good availability levels.”

The retail boss also said the supermarket has reduced its range of certain items, highlighting pasta, in a bid to simplify its supply chain.

It came as the firm lifted its profit targets for the year on the back of a “strong” half-year of sales and announced plans to hand about £500 million back to shareholders.

Tesco chief executive Ken Murphy
Tesco chief executive Ken Murphy (Ben Stevens/Parsons Media/PA)

The supermarket giant hailed a robust performance as it told investors that both sales and profits grew more than expected in the six months to August.

Tesco lifted its adjusted operating profit target for the year to between £2.5 billion and £2.6 billion as a result, as it said it “outperformed” its competition.

The retailer said profits were boosted by strong sales but flagged that it expects some of its recent elevated sales will “fall away” over the rest of the year.

Group revenues jumped by 5.9% to £30.4 billion for the six months, compared with the same period last year.

Operating profits increased by 28% to £1.3 billion for the period.

Tesco also launched a share buyback scheme which it said will see the firm buying £500 million of shares back from investors.

The company also said it has taken a £193m hit from settling claims relating to its misstatement of profits in 2014.

Mr Murphy said: “We’ve had a strong six months, sales and profit have grown ahead of expectations, and we’ve outperformed the market.

“I’m really pleased with our progress as we increased customer satisfaction and grew market share leading to a strong financial performance.

“With various different challenges currently affecting the industry, the resilience of our supply chain and the depth of our supplier partnerships has once again been shown to be a key asset.”

Shares in Tesco increased by 4.7% to 265p in early trading.