While group sales at Tesco increased by over five per cent in its latest financial year, Britain’s largest supermarket saw profits drop by half as shoppers bought fewer items with higher price tags.

Tesco’s accounts for the 12-month period ended 25 February revealed that pre-tax profits had been slashed from £2 billion in 2021 to £1 billion last year.

But the retailer recorded an increase in revenue of over seven per cent to £65.7 million.

Sue Davies, head of food policy at Which?, said that the results show that Tesco is “doing very well during the cost-of-living crisis” despite millions of its customers “struggl[ing] to put food on the table”.

“It’s clear that Tesco and all the major supermarkets could be working harder to make food more affordable for customers who need help,” she added, calling on the supermarket to make pricing clearer.

Tesco boss Ken Murphy said that it had been an "incredibly tough year" for many of the company's customers.

"Our results reflect our continued investment in delivering great value and quality for our customers, whilst at the same time looking after our colleagues," said the chief executive. "This is despite unprecedented levels of inflation in the prices we have paid our suppliers for their products, and the cost of running our own operations."

The results come after it was revealed that Tesco was looking to get price cuts from suppliers, indicating that a period of steep grocery price increases could be coming to an end.

According to a report from The Sunday Times, the supermarket is keen to start cutting prices for consumers on products where its cost-monitoring team has decided inflationary pressures have eased.

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