Tesco experienced a 220 per cent hike in pre-tax profits last year, jumping from £636 million in 2020 to £2.03 billion.

According to the supermarket retailer’s latest financial results, group sales were up by 2.5 per cent, while operating profit surged by 58 per cent during the 12-month period.

Overall revenue was up by 6 per cent to £61.3 billion.

“Clearly, the external environment has become more challenging in recent months,” said Ken Murphy, chief executive, Tesco. “Against a tough backdrop for our customers and with household budgets under pressure, we are laser-focused on keeping the cost of the weekly shop in check – working in close partnership with our suppliers, as well as doing everything we can to reduce our own costs.”

He added that the Tesco’s strong performance has driven the increased pace and scale of its capital return programme, with the company committing to repurchase shares worth £750 million in the next year.

Tesco said that given disruption in the external environment it has chosen to give a wider range in its latest profit guidance. The company’s guidance for the next year is for an adjusted operating profit of between £2.4 billion and £2.6 billion.

It added that the extent of further normalisation in customer behaviour as the world comes out of the pandemic, the level of cost inflation experienced and the company’s ability to partially offset it through accelerating Save to Invest, and the investment required to maintain the strength of its price position relative to the market, would be likely to influence its performance over the next year

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