British retail chain Tesco’s adjusted operating profit from retail activities fell 6.3 percent to 2.49 billion pounds (about 66 billion CZK) in the last financial year, the company said today in a preliminary report on its results. It justified the decline by saying it had not passed on all of the high inflation-related cost increases to consumers. Britain‘s biggest retail chain, expects profits to stagnate this financial year due to inflation.
Tesco’s Revenue Growth
Tesco has a 27 percent share of the British grocery market. Revenues for the financial year to the end of February this year rose 5.3 per cent to £57.6 billion.
“We expect to be able to achieve broadly the same level of adjusted operating profit from our retail operations in 2023/24,” the company said. Tesco is “battling an unprecedented level of inflation” in the prices paid to suppliers and is trying to mitigate its impact on customers, chief executive Ken Murphy said.
“It’s been an incredibly tough year for many of our customers. We were determined to do everything we could to help them,” he said. “We will continue to prioritise investment in our customer offer while doing everything we can to offset the impact of continued increased cost inflation,” the chain said.
Tesco faces competition
Tesco, like its rivals, faces stiff competition from discount grocers Aldi and Lidl, Bloomberg reported. Consumers are being pushed by a lack of cash to try to save money when buying groceries. Tesco is struggling to keep prices low to attract customers while paying higher utility bills and staff wages. The company benefits from people cooking more at home to save money.
Britain’s annual inflation rate rose surprisingly in February to 10.4 per cent, up from 10.1 per cent in January. Higher food prices and more expensive drinks in pubs and restaurants were the main contributors to the rise. For food, the inflation rate rose to a record 17.5 per cent in March.
The firm’s shares have gained around 19 per cent since the start of the year. Tesco will pay a full-year dividend of 10.9 pence per share, in line with the previous year. The firm plans to buy back an additional £750m of its shares next year.
Source: ČTK
