The UK's largest supoermarket chain, Tesco has posted its latest interim results 2022/23 showing a strong trading performance built on consistent and competitive offer, leading to strong retail free cash flow.
Highlights
• Retail LFL sales were up by 3.2% following strong performance throughout pandemic; 1-yr UK & ROI LFL reflects post-pandemic normalisation & cost-of-living changes in customer behaviour; strong Booker growth in catering & retail.
• Statutory revenue £32.5bn, up +6.7% including strong growth in fuel sales
Total adjusted retail operating profit5 £1,248m, down (10.0)% at constant rates
• UK & ROI adjusted operating profit £1,169m, down (11.5)% mainly due to the impact of reduced YoY volumes as a result of post-pandemic normalisation, in addition to net cost inflation and our ongoing investment in the customer offer
• Bank adjusted operating profit £67m, down (6.9)% driven primarily by up-front charges on new business
• Statutory operating profit £736m.
Ken Murphy, Chief Executive, said, “We know our customers are facing a tough time and watching every penny to make ends meet. That’s why we’re working relentlessly to keep the cost of the weekly shop as affordable as possible, with our powerful combination of Aldi Price Match, Low Everyday Prices and Clubcard Prices, together covering more than 8,000 products, week in, week out.
'We’re also investing significantly in our colleagues, with a further boost to pay announced today for our UK stores. I want to say a big thank you to the whole Tesco team, and our supplier partners – together, we have built a more resilient, consistent business that’s well set up for the future.'
Ken went on, 'By staying laser-focused on value and sticking to our strategy of inflating a little bit less and a little bit later, our price position has got even more competitive. Customers are seeking out the quality and value of our own brand ranges as they work to make their money go further, whether they are switching from branded products, between categories or cutting back on eating out
'As we look to the second half, cost inflation remains significant, and it is too early to predict how customers will adapt to ongoing changes in the market. Despite these uncertainties, our priorities are clear.'
Ken concluded, 'We have the right long-term strategy and we will continue to balance the needs of all of our stakeholders. Most importantly, we will stay focused on delivering value for our customers and supporting them in every way we can.”