Tesco UK boss Matt Davies: 'We will do everything' to keep prices low following Brexit

Davies dubbed food price inflation “a bad, bad thing” and said it was “our focus” to drive prices down despite the plummeting value of the pound.

Tesco was embroiled in a well-publicised row with Unilever last week after the supplier demanded a 10% increase in the shelf price of popular products including Marmite, PG Tips, Pot Noodles and Ben & Jerry’s ice cream.

The supermarket giant refused to increase prices and a series of SKUs were temporarily de-listed from Tesco’s website, before a deal was eventually thrashed out.

The steep fall in the value of the pound following Britain’s vote to leave the EU has left retailers and suppliers facing rising sourcing costs, which many analysts predict will spark similar negotiations and, ultimately, a period of food price inflation.

But Davies said he was “proud” of the fact Tesco has slashed prices by 6% over the past two years and voiced his determination to continue that record.

He told the IGD Big Debate: “We are very, very clear that as the number one food retailer in the UK that inflation is a bad, bad thing in food.

“We will do everything we can do on behalf of customers across the UK to make sure that inflation on food is kept to a minimum. That’s our focus.

“Everybody should be very clear how damaging inflation is to the economy, to retail business, to manufacturing business and how lethal it can be to millions of people who are struggling to live from week to week.”

Davies said Unilever and its other supply partners were “aware of the damaging effects of inflation” and added: “We have, 100% of the time, massive respect for Unilever. 99% of the time we operate brilliantly together.”

Former Halfords and Pets at Home boss Davies also used his appearance at the event to champion the future of Tesco’s larger stores, following a resurgence in their like-for-like sales performance since he took the helm of the UK business.

“I’m a believer in big stores,” Davies said.

“What we are seeing now is that with large stores, which were written off because they were going backwards by significant like-for-like decline, we can actually make progress with those stores.

“So do not write off the main shop.”