Tesco Increases Meal Deal Price by 25p

Tesco has announced a rise in the price of its popular lunchtime meal deal, marking another indicator of increasing food costs in the UK. Effective Thursday, the combined price for a main, snack, and drink will increase from £3.60 to £3.85 for Clubcard holders, while non-Clubcard customers will pay £4.25, up from £4.00.

---

Tesco Raises Meal Deal Prices as Inflation Pressures Persist

The price hike comes amid sustained inflationary pressures on the UK food sector where costs have surged to levels not seen in decades. Tesco’s meal deal, which had held steady at £3 for around ten years before a previous increase last October, reflects ongoing challenges faced by retailers balancing rising supplier and operational costs against consumer spending power.

A Tesco spokesperson defended the move, stating, “Our meal deal remains great value. Individual items included can cost over £8 if purchased separately.” The supermarket also increased prices on its premium meal deal option, raising the cost from £5 to £5.50 for Clubcard holders and £6 for others.

---

Loyalty Cards A Competitive Tool Amid Price Increases

Loyalty schemes play a crucial role in the supermarket industry’s pricing strategies. Tesco’s Clubcard, used by approximately 80% of its shoppers, offers discounted prices and targeted promotions by collecting detailed customer purchasing data. Research from market analyst Kantar shows the average UK shopper holds loyalty cards with three different supermarkets.

“The different pricing for Clubcard holders and other customers highlights how supermarkets are seeking to retain loyalty and maintain sales volumes during a period when food price inflation is squeezing retailer margins,” said retail analyst Sarah Jenkins of Mintel.

---

Consumer Reactions: Value and Alternatives Under Scrutiny

Consumers are feeling the strain of rising meal deal prices. Kristina, a 19-year-old student from Nottingham, shared her frustrations publicly after seeing the price rise. “Tesco’s meal deal was good if you were in a rush but has become more expensive over time,” she told the BBC.

Kristina added, “Other shops like Poundland now offer better value, and unless their prices increase sharply, I won’t buy another Tesco meal deal for a long time.” This sentiment is echoed by other shoppers grappling with inflation-driven price hikes across a broad range of grocery items.

---

Competitors Adjust Prices Differently Amid Rising Costs

Tesco’s price increase is not isolated. Sainsbury’s raised its lunchtime multibuy from £3.75 to £3.95 in June, maintaining a single price regardless of Nectar card membership. A Sainsbury’s spokesperson said, “With millions of possible combinations, we continue to offer one of the best value meal deals around.”

Meanwhile, several other major retailers, including Boots, Co-op, Superdrug, and Waitrose, have frozen their meal deal prices, which typically range from £3.75 to £5.35. Asda has also confirmed no plans to raise prices on its “Food To Go” lunchtime offer.

---

Broader Context: UK Food Inflation and Economic Pressures

The increase in Tesco’s meal deal pricing aligns with the wider UK economic environment, where food and non-alcoholic beverage prices have risen by 4.9% over the 12 months to July 2025, according to the Office for National Statistics (ONS). Over the past five years, food prices have surged approximately 37%, a stark contrast to the 4.4% increase recorded in the previous five-year period.

Robert Plummer, an economist at the Resolution Foundation, explained, “Persistent inflation in food prices reflects a mix of supply chain disruptions, energy costs, and labour market tightness. Consumers are particularly sensitive to price rises in essential items such as food.”

---

Retailers’ Concerns Over Additional Tax Burdens

The British Retail Consortium (BRC), representing dozens of UK retailers including Tesco, recently sent a joint letter to Chancellor Rachel Reeves warning against the unintended consequences of proposed business taxes in the upcoming Autumn Budget.

The letter stated: “Retailers have worked hard to shield customers from inflation, but the continued cost pressures, including recent government measures on employer National Insurance and packaging taxes, have added an estimated £7 billion in new operating costs to the retail sector.”

The Bank of England has assessed that these increased costs may contribute a further 1% to 2% rise in food prices. It forecasts food price inflation to peak at around 5.5% by year-end before easing to between 2% and 3% in 2026.

---

Outlook: Inflation Pressure and Consumer Spending

Despite retailers’ efforts to absorb costs, rising prices risk dampening consumer spending, with lower-income households disproportionately affected by food inflation. The Competition and Markets Authority (CMA) highlighted concerns about supermarket pricing power in a 2024 report, calling for increased market competition to help ease price pressures.

Looking ahead, food price trajectories will depend heavily on global commodity markets, supply chain stability, and government policy. Consumer advocacy groups urge retailers to balance necessary price adjustments with accessible options for financially vulnerable shoppers.

---

Conclusion

Tesco’s lunch meal deal price hike underscores the ongoing challenges retailers face amid rising inflation and increasing operational costs. While loyalty schemes soften the impact for many customers, the overall trend points to sustained upward pressure on food prices across the UK. As the sector navigates these dynamics, the implications for consumer budgets, retail competitiveness, and economic policy remain critical to monitor in the months ahead.

---

For more detailed analysis and ongoing coverage of US labor markets, trade policies, UK government, finances and markets stay tuned to  PGN Business Insider