Tesco raises guidance following 'strong' sales and profit surge

No comments

Tesco has raised its full-year profit expectations as boss Ken Murphy said the grocer is “outperforming the market” amid a sales uplift and profit spike.

Tesco trolleys

Tesco reported a 107% spike in pre-tax profit to £1.1bn in the 26 weeks to August 28, while adjusted retail operating profit rose 17% to £1.4bn, up 41% across the group to £1.5bn.

The supermarket attributed its surge in interim profits to “higher sales and lower Covid-19 costs”, which it said was partially offset by its repayment of £249m business rates relief in the second half of its past financial year.

Sales during the period rose 3% across the group to £27bn, with UK and Ireland like-for-like sales up 2.4% and 9.1% on a one-year and two-year basis respectively.

As a result of this strong interim performance, Tesco said it now expects its adjusted retail operating profit for this financial year to be between £2.5bn and £2.6bn.

The grocer said it had grown market share and recorded an uplift in customer satisfaction across all areas of the business during the financial period, bolstered by the relaunch of its Low Everyday Prices range across 1,600 products.

Tesco also expanded its Aldi price match to 650 products and introduced Clubcard Prices to its Express stores.

Online sales at Tesco rose 2.3% year on year in like-for-like terms, up 74% on a two-year basis, with over 20 million households using Tesco’s loyalty programme Clubcard including 6.6 million app users.

The grocer also unveiled its new strategic priorities under boss Ken Murphy, which will include a focus on value across price, quality and sustainability, investing in Tesco’s Clubcard offer, increased convenience for shoppers and cost efficiency across the business.

Murphy said: “We’ve had a strong six months; sales and profit have grown ahead of expectations and we’ve outperformed the market.

“I’m really pleased with our progress as we increased customer satisfaction and grew market share leading to a strong financial performance. With various different challenges currently affecting the industry, the resilience of our supply chain and the depth of our supplier partnerships has once again been shown to be a key asset.”