Tesco profits jump 159% as inflation ‘lessens substantially’

Tesco recorded pre-tax profits of £2.3 billion in its latest financial year, an increase of 159 per cent for the British supermarket chain.

The retailer’s chief executive Ken Murphy said that inflationary pressures had “lessened substantially”, with the company reporting a seven per cent hike in group sales over the 12-month period.

However, the Tesco boss explained that the company was concious that there are still many UK customers struggling financially.

“We have strong momentum in our business, and are encouraged by signs of improving consumer sentiment,” he continued.

But the supermarket did struggle in some areas, with adjusted operating profit in Central Europe down 50 per cent to £90 million. The company blamed this on cost inflation headwinds and regulatory actions in Hungary.

Tesco said it exceeded its savings targets, with £640 million across the year and £1.2 billion combined savings over the past 24 months.

The company is planning a further £500 million in efficiency savings for the 12 months ahead.

Tesco Clubcard

Tesco has also expanded its Clubcard reach, with the number of UK households using the membership scheme rising 6.2 per cent.

Clubcard sales penetration increased across all markets, with the UK at 82 per cent, Central Europe 87 per cent, Mobile 88 per cent, rest of the world 85 per cent, and Bank at 66 per cent.

Tesco recently said it would make changes to how it displays Clubcard pricing after facing criticism from Which?.

The consumer watchdog in 2023 reported Tesco to the Competition and Markets Authority (CMA), claiming that it “could be breaking the law” in failing to provide unit pricing on products with Clubcard promotion prices.

Tesco at the time said that it was “disappointed” by the claims made by Which?, and said that its price labelling had been endorsed by Trading Standards.

However, Tesco UK chief executive Jason Tarry later said that it would add unit pricing to Clubcard Prices labelling.

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