The cost of living crisis has prompted a significant shift towards cooking from scratch in UK homes, as revealed by Tesco’s CEO Ken Murphy.
- The cost of living crisis has prompted a significant shift towards cooking from scratch in UK homes, as revealed by Tesco's CEO Ken Murphy.
Cooking from: Changes in Consumer Behaviour
According to Murphy, who spoke to reporters following Tesco’s latest financial results, the changes in shopping habits that began with the initial cost-of-living crisis in 2022 have persisted. He noted, “When we had the first cost of living crisis three years ago there was quite an adjustment in shopping habits at that stage and those habits have stuck.”
Growing Preference for Dining In
As consumers increasingly choose to eat at home, Tesco has seen its market share rise to 28.4%, an increase of 0.8 percentage points from the previous year. This trend has been particularly beneficial for the supermarket’s premium offerings, with sales of its “Finest” range experiencing a remarkable 16% growth year-on-year in the first half of the financial year, which ended on August 23. This marks the third consecutive year of double-digit growth for this brand.
Impact on the Hospitality Sector
The shift towards home dining is having adverse effects on the hospitality sector, with restaurants facing challenges as consumers opt for high-quality supermarket meals instead. Murphy pointed to several factors contributing to this trend, including the lingering effects of the COVID-19 pandemic and the rise of home entertainment, saying, “It might be kind of a COVID hangover, it might be part of the Netflix phenomenon of dine in, watch a movie, have a bottle of wine.”
Focus on Fresh Ingredients
Another notable trend is the increase in purchases of fresh food, indicating a growing interest in cooking meals from scratch. This shift reflects consumers’ desire for healthier options as well as a means to save money amidst rising living costs.
Concerns Over Economic Outlook
As consumers navigate these changes, there is also mounting concern about the upcoming government budget, which is expected to include tax increases. Murphy has urged Finance Minister Rachel Reeves to present a budget that is “pro-growth and pro-jobs” during the announcement scheduled for November 26. He expressed the need for relief, stating, “In the last budget (October 2024), the industry and the sector incurred substantial additional operating costs, we’re doing our best to deal with them but enough is enough.”
