Tesco has revised its profit expectations upwards following a robust financial half-year.
- Sales have increased by 4%, with particular strength in fresh food and premium ranges.
- The retailer has gained market share, reaching its highest level since January 2022.
- Net switching gains have been consistent, with 19 consecutive periods of positive growth.
- Operational improvements and new products have further supported Tesco’s performance.
Tesco, one of the leading supermarket chains, has announced an upward revision in its profit expectations for the fiscal year, following a 10% jump in half-year profits. Sales increased by 4% to £31.5 billion, with notable growth in fresh food and Tesco’s Finest premium range, which recorded nearly a 15% rise in volumes.
The Chief Executive, Ken Murphy, expressed optimism about the company’s current position, stating that Tesco is now anticipating a retail adjusted operating profit of £2.9 billion. This marks an increase from the previous forecast of ‘at least £2.8 billion.’ Tesco has successfully witnessed net switching gains over 19 consecutive four-week periods in the UK, a testament to its strategic market positioning.
Tesco attributes its positive performance to investments in additional store hours and the creation of over 2,000 new colleague roles year on year. Innovation and sustainability efforts have also played a vital role, with the launch of 282 new products and enhancements to 580 existing lines. Additionally, the Clubcard loyalty programme experienced a substantial rise in sales penetration across all markets, reaching 82% in the UK.
Murphy highlighted Tesco’s competitive edge, emphasizing its combination of price, quality, and innovation. The retailer has been the most affordable full-line grocer for nearly two years, a factor that has likely contributed to a 62 basis point increase in market share to 27.8% in the 12 weeks leading up to September 1, according to Kantar data.
Looking forward, Tesco plans to enhance its operational capabilities with the opening of a new chilled distribution centre in Aylesford, scheduled for summer 2025. This facility will incorporate robotic automation to optimise operations and deliver a ‘seamless’ shopping experience. Murphy underscored the company’s commitment to offering excellent value, quality, and service, which is reflected in increasing customer satisfaction scores and continuous product development.
Tesco’s strategic initiatives and robust financial performance underscore its ability to deliver value across its operations.
