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Tesco has seen its full-year profits plunge by 50.8% to £1bn, down from £2.03bn the prior year, as inflation took its toll on the supermarket’s business throughout the year.
Despite the cost-of-living crisis, revenues rose by 7.2% to £66m and retail like-for-like sales rose by 5.1%, yet the group was still hit by the “unprecedented” levels of inflation in the prices paid to suppliers as well as the high running costs of its operations.
The supermarket said it had been working with suppliers to “mitigate as much inflation as possible” however, and reported a record supplier satisfaction score of 86.6%.
Tesco also said it had invested heavily over the year, for example with its biggest ever investment in pay, with UK store employees now paid £11.02/hour with access to additional benefits.
It added that it had introduced its “most competitive offer ever”, with the “powerful combination” of Aldi Price Match, Clubcard Prices and Low Everyday Prices helping it “mitigate inflation and drive value perception ahead of the market”.
The group said it has also bought back over £1bn worth of shares and today (13 April) has announced a further £750m worth over the next 12 months.
CEO Ken Murphy said: “It’s been an incredibly tough year for many of our customers, and we have been determined to do everything we can to help. Our results reflect our continued investment in delivering great value and quality for our customers, whilst at the same time looking after our colleagues.
“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. I am very proud of the way the Tesco team has responded to these challenges and would like to thank every colleague for the contribution they have made.”
He added: “The resilience and agility that we have developed over the last few years has created a sustainable competitive advantage that leaves us well-placed to deal with any challenges that may arise. It has enabled us to deliver another strong performance across the group, whilst continuing to make strategic progress.”
