The UK’s most popular supermarket has said it is to introduce “strong deals” over the next three months as it prepares for Christmas.

It’s being done as Tesco chief executive Ken Murphy said he expected people to spread Christmas spending over a wider period to be more manageable and affordable.

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The supermarket price war, spurred by grocers competing to lower costs and win customers, “could be even more intensive” over the next months, Mr Murphy said.

Tesco, which is the UK’s number one supermarket by market share, has been successful in this fight, saying it was “continuing to win with customers”.

Defending higher profits

As a result, it said on Thursday that it expected annual profit to be higher than first thought, in the region of £2.9bn to £3.1bn.

It’s attracted criticism from the union Unite, whose general secretary Sharon Graham said Tesco “has profited from the cost-of-living crisis, making a fortune through unfairly inflating grocery prices”.

But Tesco’s chief financial officer Imran Nawaz defended the company’s profits, saying its investment to bring costs down “worked better than we thought”.

“When you sell more, you make more.”

This was the biggest contributor to the higher profit outlook, he added.

‘Enough is enough’

A lot of the overall price rises in the UK, however, are due to policy measures, Mr Murphy said, referring to a new plastic packaging tax and higher employers’ national insurance contributions.

When asked what the chain hoped to see in the upcoming 26 November budget, Mr Murphy said he didn’t want it to be “harder for the industry to deliver great value for customers”.

After last year’s budget delivered “substantial additional operating costs”, he said, “enough is enough”.

The CEO said he had made “no decision” and “can’t speculate” on whether Tesco would close shops if its larger stores are not made exempt from paying business rates.

The company pays more than £700m a year in tax on premises, he added.

Consumer trends

The supermarket chain has also benefited from the trend it observed of people cooking at home and eating in more, it said.

There’s been an uptick in sales of fresh food and a “meaningful increase” in cooking from scratch.

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This could be a hangover from the COVID-19 era, maybe due to the growth of streaming services, or potentially a money-saving exercise, Mr Murphy said.

“It’s hard to put your finger on the single reason, but it’s definitely a trend”.

Similarly, Tesco’s luxury own-brand line continued to grow in popularity with double-digit sales growth for the third year in a row.

Monthly disposable income fell by £40 per person between Boris Johnson’s election victory in December 2019 and Rishi Sunak’s defeat in July 2024.

It is the first time in recorded British history that disposable income has been lower at the end of a parliamentary term than it was at the start, Sky News Data x Forensics analysis reveals.

Disposable income is the money people have left over after paying taxes and receiving benefits (including pensions). Essential expenses like rent or mortgage payments, council tax, food and energy bills all need to be paid from disposable income.

Previously published figures showed a slight improvement between December 2019 and June 2024, but those were updated by the Office for National Statistics on Tuesday.

There has been an uplift in the last year, although we’re poorer now than we were at the start of the year, and today we only have £1 more on average to spend or save each month than we did at the end of 2019.

That represents “an unmitigated disaster for living standards”, according to Lalitha Try, economist at independent living standards thinktank the Resolution Foundation.

Have things gotten better under Labour?

Disposable income has increased by £41 per person per month since Labour took office in July 2024. However, that masks a significant deterioration in recent months: it is lower now than it was at the start of 2025.

In the first six months of Labour’s tenure, disposable income rose by £55, a larger increase than under any other government in the same period. In part, this was down to the pay rises for public sector workers that had been agreed under the previous Conservative administration.

But the rise also represents a continuation of the trajectory from the final six months of the outgoing government. Between December 2023 and June 2024, monthly disposable income rose by £46.

That trajectory reversed in the first part of this year, and the average person now has £14 less to spend or save each month than they did at the start of 2025.

Jeremy Hunt, Conservative chancellor from October 2022 until the July 2024 election defeat, told Sky News: “The big picture is that it was the pandemic rather than actions of a government that caused it [the fall in disposable income].

“I clawed some back through (I know I would say this) hard work, and Labour tried to buy an instant boost through massive pay rises. The curious thing is why they have not fed through to the numbers.”

The £40 drop between Mr Johnson’s electoral victory in 2019 and Mr Sunak’s loss in 2024 is roughly the same as the average person spends on food and drink per week.

By comparison, since 1955, when the data dates back to, living standards have improved by an average of £115 per month between parliamentary terms.

Vital services, things like energy, food and housing, that all need to be paid for out of disposable income, have all increased in price at a faster rate than overall inflation since 2019 as well.

This means that the impact on savings and discretionary spending is likely to be more severe for most people, and especially so for lower earners who spend a larger proportion of their money on essentials.

Responding to our analysis, the Resolution Foundation’s Lalitha Try said: “Average household incomes fell marginally during the last parliament – an unmitigated disaster for living standards, as families were hit first by the pandemic and then the highest inflation in a generation.

“We desperately need a catch-up boost to household incomes in the second half of the 2020s, and to achieve that we’ll need a return to wider economic growth.”

Analysis by the Joseph Rowntree Foundation, which also takes into account housing costs, says that disposable income is projected to be £45 a month lower by September 2029 than it was when Labour took office.

We approached both Labour and the Conservative Party for comment but both failed to respond.

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How are Labour performing in other areas?

Labour have made “improving living standards in all parts of the UK” one of their main “missions” to achieve during this parliament.

Sam Ray-Chaudhuri, research economist at the Institute for Fiscal Studies, told Sky News: “Labour’s mission to see an increase in living standards over the parliament remains a very unambitious one, given that (now) almost every parliament has seen a growth in disposable income.

“Doing so will represent an improvement compared with the last parliament, but it doesn’t change the fact that we are in a period of real lack of growth over the last few years.”

As well as the living standards pledge, the Sky News Data x Forensics team has been tracking some of the other key promises made by Sir Keir and his party, before and after they got into power, including both economic targets and policy goals.

Use our tracker to see how things like tax, inflation and economic growth has changed since Labour were elected.

The policy areas we have been tracking include immigration, healthcare, house-building, energy and crime. You can see Labour’s performance on each of those here.

Click here to read more information about why we picked these targets and how we’re measuring them.

The Data and Forensics team is a multi-skilled unit dedicated to providing transparent journalism from Sky News. We gather, analyse and visualise data to tell data-driven stories. We combine traditional reporting skills with advanced analysis of satellite images, social media and other open source information. Through multimedia storytelling we aim to better explain the world while also showing how our journalism is done.

On its face, the Department of Health and Social Care v PPE Medpro Limited was not a case about Michelle Mone, or VIP fast lanes, or the politics and profiteering of the pandemic years.

Rather, as the DHSC’s barrister made clear on the first morning of the first day of hearings, it was about 25 million surgical gowns sold to the NHS for £122m. Were they, or were they not, appropriately certified as sterile, and thus fit for use?

The answer, unequivocally according to Lady Justice Cockerill’s judgment, was no, leaving PPE Medpro in breach of contract, and liable to repay just short of £122m.

This case was always going to be about more than dusty contract law however. By targeting the company founded and controlled by Doug Barrowman, the husband of Baroness Mone, the DHSC was taking on the couple who encapsulated the COVID PPE scandal.

Her public profile as the media-friendly lingerie entrepreneur ennobled by David Cameron, blithely sharing snaps from the Lady M yacht while the country endured lockdown, and her husband’s repeated hollow denials, made them the faces of that failure.

PPE Medpro won more than £200m of contracts only after Baroness Mone used her political contacts, including Michael Gove, to introduce the firm to the government’s VIP ‘fast lane’ and short-circuit normal procurement rules.

She did so on the same day in May 2020 that her husband Doug Barrowman incorporated the company, and then lobbied hard over the next six months to see the deal completed. The judge described her as PPE Medpro’s “big gun”, deployed when civil servants were perceived to be holding up the deal.

When challenged the pair then lied for more than two years about their links to the company, only admitting their role after dogged reporting by The Guardian revealed not just her role in lobbying on its behalf, but the extraction of more than £65m in profit.

When challenged in a BBC interview and a self-funded documentary, Mone said that while she regretted not admitting her role, lying to journalists was not a crime.

The couple’s response to the ruling was in keeping with their approach throughout. The day before the judgment PPE Medpro filed to enter administration, with accounts showing assets of just £666,000, ensuring that any discussion about repayment will be with the administrator, not Mr Barrowman.

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Baroness Mone meanwhile took to social media to claim the couple had been “scapegoated and vilified” for wider failings, and shared correspondence in which they offered to settle the case for £23m.

After the judgment was delivered the baroness called it “an Establishment win”, while Mr Barrowman, whose company offered no factual evidence in court and was not called as a witness, called it a “travesty of justice”.

Labour ministers, led by the chancellor, praised the court’s independence even as they celebrated a judgment which, if nothing else, may remind voters of the chaos of the Boris Johnson years.

Getting the money back, the central point of the legal exercise, will be harder than stirring bad memories.

The DHSC has appointed lawyers to try and help it “recover every penny” but it is unclear how that can be achieved given Medpro’s administration.

It could choose to pursue Mr Barrowman, who boasted of huge wealth earned in fintech and lived a lifestyle to match, but it is unclear how, and whether he still has the means.

The National Crime Agency has frozen £75m of the couple’s assets as part of its ongoing investigation, and the couple are reported to have sold homes and other assets in recent years.

Asked if they might repay the profits earned, or at least the £23m offered in settlement, Mr Barrowan’s spokesman told Sky News: “The DHSC would have to negotiate with the administrators, but the backers of PPE Medpro have always tried to negotiate with DHSC and they’re happy to engage.”