Tesco: ‘better position to navigate challenging market’

The UK’s biggest food and drink retailer saw sales rise 4.3% to £49.9 billion, in its year end results, saying it was in a far stronger position to navigate the “challenging” retail market.

The retailers’s UK like-for-like sales showed Tesco’s first full year growth since 2009-2010, up 0.9%, with UK food like-for-likes up 1.3%. Operating profits across the group rose 29.9% to £1,280, with net debt shrinking 27%, down from £5.110 billion last year to around £3.729 billion this year.

The company also saw an improvement in its UK and ROI operating profit, which it attributed to investing in lowering core prices and increasing the quality of its fresh offer, and its range to appeal to customers.

“For example, within our beers, wines and spirits category we have focused on improving the relevance and profitability of our offer by broadening our range of speciality beers, increasing the prominence of own brand products and maintaining a strong, stable core price position in an extremely promotional market,” the company statement said.

Chief executive Dave Lewis said the retailer had made better progress than expected in its year end results and was confident of making further progress towards its medium-term objectives.

“Today, our prices are lower, our range is simpler and our service and availability have never been better. Our exclusive fresh food brands have strengthened our value proposition and our food quality perception is at its highest level for five years.  At the same time, we have increased profits, generated more cash and significantly reduced debt,” he said.

“We are ahead of where we expected to be at this stage, having made good progress on all six of the strategic drivers we shared in October.  We are confident that we can build on this strong performance in the year ahead, making further progress towards our medium-term ambitions.”

He noted the strength of its brands, with the rate of promotions falling to 32%, and the price of a typical basket down 6% since Sept 2014. Availability had also improved, and the retailers had achieved cost savings of £226m, taking it towards it £1.5 billion medium-term target.

He also reaffirmed the progress of the proposed merger with Booker, which was announced in January to unlock growth in the fast-growing ‘out-of-home’ food market.

“We are continuing to engage as planned with the Competition and Markets Authority in advance of seeking shareholder approval for the transaction, anticipated in late 2017/early 2018,” Lewis said.

However, its profit before tax was hit following its agreement to pay £235 million payout to the Serious Fraud Office and the Financial Conduct Authority over past financial practises. This saw profit before tax fall 28.2% to £145 million, down from £202 million last year.

Read more:

Tesco adds new ‘top of the line’ wines to its finest* range

Tesco fined by Serious Fraud Office for past financial practices

Leave a Reply

Your email address will not be published. Required fields are marked *

Please note that comments are subject to our posting guidelines in accordance with the Defamation Act 2013. Posts containing swear words, discrimination, offensive language and libellous or defamatory comments will not be approved.

Subscribe to our newsletters

Sales - Global Wine Competitions

The Drinks Business
London, UK

London Account Manager

Speciality Drinks
London, UK

Sales Advisor

The Whisky Exchange
London, UK

Customer Services Administrator

Speciality Drinks
London, UK

Business Development Manager

Pol Roger Portfolio
London, UK

Business Development Executive – Spirits

Pol Roger Portfolio
London, UK

Trading Administrative Assistant

Vin-Exchange Ltd
London, UK

Events Sales Executive

The Drinks Business Hong Kong
Hong Kong

On-Trade Regional Sales Manager

Anthony Byrne Fine Wines
West Midlands, UK

Pink Rosé Festival

Cannes,France
7th Feb 2019

Wine Paris

Paris,France
11th Feb 2019
Click to view more

The Global Fortified Masters 2018

Deadline : 25th January 2019

The Global Pinot Noir Masters 2019

Deadline : 1st February 2019

Click to view more

Rioja Masters 2018

View Results

The Global Beer Competition

View Results

Click to view more