Tesco reported that recent geopolitical tensions in the Middle East have affected consumer sentiment but have not resulted in increased prices at its stores. The supermarket chain disclosed a slower-than-anticipated rise in sales over the past quarter, attributing some of the downturn to uncertainty stemming from the ongoing conflict in Iran.

Chief Executive Ken Murphy acknowledged that the war has heightened fears among shoppers about potential economic consequences, yet he emphasized that there has been no significant change in purchasing behavior to date. He noted that while the conflict has led to rises in oil and gas prices, it has not yet triggered noticeable food price inflation within Tesco’s supply chain.

Tesco’s reported food inflation for the latest quarter came in below the 2.2% figure released by the Office for National Statistics, representing the lowest rate since early 2024. The company’s cautious outlook highlights concerns about how prolonged instability in the Middle East might influence consumer confidence and supply costs moving forward.

Murphy’s remarks suggest that while the current impact on retail pricing remains limited, uncertainties related to the conflict continue to influence shoppers’ attitudes, potentially affecting demand. The situation remains under close observation by Tesco as it navigates ongoing market volatility.