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Tesco has seen pre-tax profits soar by 159.5% to £2.3bn in its full-year results, up from £882m the prior year, as shoppers began to spend more when price inflation “lessened substantially”.
In its preliminary results for the year ended 24 February 2024, group sales were up by 7.4% to £61.5bn, while retail LFL sales rose by 6.8% as inflation fell throughout the year.
According to Tesco, whilst the impact of inflation was still evident across all markets, this reduced gradually across the year as many global commodity prices fell, and the supermarket passed savings on to customers by cutting prices across everyday grocery lines.
While the group was “conscious that things are still difficult for many customers”, it cut the prices on more than 4,000 products, with customer demand remaining “resilient” and volume performance improving across the year.
It also continued its store expansion and improvement programme, with a net increase of 87 stores and 389 store refreshes.
Looking ahead, the supermarket expects retail adjusted operating profit of at least £2.8bn for the 2024/25 financial year.
CEO Ken Murphy said: “This strong performance reflects the hard work of colleagues across the whole Tesco Group, and their commitment to serving our customers. Customers are choosing to shop more at Tesco, which is reflected in growing market share as they respond to the improvements we’ve made to the value and quality of our products.
“Inflationary pressures have lessened substantially, however we are conscious that things are still difficult for many customers, so we have worked hard to reduce prices and have now been the cheapest full-line grocer for well over a year.”
He added: “We have continued to invest in helping customers where it matters most, cutting prices on more than 4,000 products and doubling down on our powerful combination of Aldi Price Match, Low Everyday Prices and Clubcard Prices. Customer perception of the quality of our products is growing ahead of the market and we continue to win customers from premium retailers, with sales of Tesco Finest now exceeding £2bn.
“We have strong momentum in our business, and are encouraged by signs of improving consumer sentiment. We’re excited about the opportunities ahead, with the right plans to keep winning with customers, as well as a great team to deliver them.”
