Tesco has reported a significant rise in half-year profits, leading to an upward revision in its full-year profit expectations.
- The supermarket’s sales have increased by 4% to £31.5bn, driven by higher volumes in fresh food and the Tesco Finest range.
- Tesco’s investments in store hours, product innovation, and sustainability have contributed to sustained growth.
- The Clubcard loyalty scheme has seen increased sales penetration, highlighting Tesco’s competitive pricing and quality.
- Tesco’s market share has risen, maintaining its position as a leading UK supermarket, with strategic expansions underway.
Tesco has revised its full-year profit outlook following a robust 10% increase in half-year profits. For the period ending 24 August, sales rose by 4%, reaching £31.5 billion, with notable growth in fresh food and the premium Tesco Finest range, which surged by nearly 15%.
Ken Murphy, Tesco’s CEO, expressed confidence in the supermarket’s robust position, now forecasting a retail adjusted operating profit of £2.9 billion, up from previous expectations of ‘at least £2.8 billion’. “We are in good shape,” Murphy declared, as Tesco experienced net switching gains for 19 consecutive four-week periods in the UK.
Tesco attributed this success to strategic investments in additional store hours—equating to over 2,000 extra roles—product quality, innovation, and sustainability efforts. During this period, the retailer launched 282 new products and enhanced 580 existing ones. The Clubcard loyalty programme demonstrated increased sales penetration, rising to 82% in the UK, showcasing the company’s competitive edge in pricing, quality, and innovation.
The retailer’s market share increased by 62 basis points to 27.8% in the 12 weeks leading to 1 September, achieving its highest level since January 2022, as reported by Kantar. Tesco plans to enhance its operational efficiency with a new chilled distribution centre in Aylesford set to open in summer 2025, integrating robotic automation to improve its ‘seamless’ shopping experience.
In his statement, Murphy reinforced Tesco’s commitment to delivering optimal value, quality, and service to its customers. He highlighted Tesco’s strategy of lowering prices on numerous products, collaborating with suppliers and growers on over 860 product developments, which has significantly enhanced customer satisfaction across various measures.
Tesco’s strategic initiatives and investments have positioned it strongly in the market, enabling significant financial success and future growth potential.
