British market leader Tesco had a record year: despite price pressure, both sales and profits rose significantly. Price pressure and inflation have lessened substantially, the supermarket group notes with relief.
Focus on prices
Tesco ended the 2023 financial year, which ended on 24 February, with a sales increase of 4.4 % to 68.2 billion pounds sterling (almost 80 billion euros). Group sales were up 7.4 %. Adjusted operating profit climbed 12.8 % to 2.76 billion pounds (3.3 billion euros), a remarkably solid growth in a year marked by high price pressure and inflation.
CEO Ken Murphy argues that price inflation for groceries has eased significantly, even though he notes that the situation is still difficult for many customers. In the past year, the supermarket chain therefore focused on promotions, such as the loyalty programme Clubcard and a lowest-price guarantee against rival Aldi. At the end of last year, some 4,000 products were reportedly cheaper than a year earlier.
For the rest of this year, Murphy expects food inflation to stabilise below 5 %. The retailer is expecting even higher profits of at least 2.8 billion pounds for the current financial year 2024/2025. Tesco completed a two-year cost-cutting programme last year, that slashed more than a billion pounds in costs.
