Standing in for the chairman of the supermarket chain, Terry Leahy, Ms Neville-Rolfe said that the supermarket followed the demand trends spelt out by their customers.

"Our experience is that the first need is to listen to the customer and then as innovatively as we can to service their wants and aspirations," said Ms Neville-Rolfe.

"As well as convenience, customers are increasingly concerned about price and value; they want healthier food; they want fresher, more local food; and they increasingly look for products that are good for the environment," she said.

"We believe strongly in improving welfare and quality standards. Tesco has grown the market for free-range and organic food as much as, if not more than, any other retailer.

"We have done this by empowering our customers: working with farmers to reduce costs, becoming more efficient and bringing organic and free-range products within the reach of more customers.

"We believe in increasing choice. Our new line of Willow Farm chicken is an example. These chickens are housed in spacious barns at the RSPCA-recommended stocking density, and priced between standard chicken and free-range and organic.

"Some people want us to go further, and restrict what we sell."

Ms Neville-Rolfe said there had been disagreements over the way the supermarket had sold some whole chickens for £1.99.

"Some say we are undoing progress on animal welfare, and that, rather than cut prices, we should only sell free-range chickens," she said.

"It's true that we cut the price, but we bore the cost of that promotion ourselves. There was no reduction in animal welfare.

"Nor do I think it is right to say we are 'undervaluing' the product. The truth is that many families are tightening their belts, and are looking for better value without a reduction in standards."

She said that there was also a demand for healthier products, but many customers did not know what was healthy and what was not. And she added that the drive for healthy options opened up opportunities for the farming community.

Ms Neville -Rolfe also said that Tesco is answering the call for local food by sourcing many products as near to the stores that sell them as possible. This she said was opening other opportunities for farmers to sell niche products locally.

She said the challenge of the demand from customers for "greener" products could be answered by the farmers and the supermarket chain working closely together.

She said that labelling products as green, as with nutritional labelling, would be welcomed by customers.

"Anyone supplying us with any product would be wise to think now how they can reduce their carbon footprint," she said.

"I want Tesco to work with you on this. We can start by helping you to measure the carbon footprint of your products. In truth we do not know exactly what we will find. But we've already made some interesting discoveries which relate direct to farmers."

Further Reading

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You can view the full speech by clicking here.