UK supermarket Tesco has released its preliminary results for the 2023/24 year, reporting that inflation pressures had “lessened substantially” resulting in a “strong performance” from the retailer.
Tesco reported a profit after tax of £1,192 million, up from the 2022/23 profit of £736 million. UK & Republic of Ireland (ROI) like-for-like (LFL) sales were up 7.3%, including UK up 7.7%, ROI up 6.8% and Booker up 5.4%.
The supermarket reported a retail adjusted operating profit of £2,760 million, up 10.9% at constant rates. Tesco’s statutory operating profit was £2,821 million, up 100.1%, while its net debt was reduced by £729 million.
Tesco said its customer demand was resilient, with volume performance improved across the year. It highlighted that its revenue had increased by 4.2% at constant rates, which it attributed to lower retail prices year-on-year.
Ken Murphy, chief executive of Tesco, 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.”
Murphy continued: “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 £2 billion.
“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.”
Outlook for 2024/24
Tesco said that it expects a retail adjusted operating profit of at least £2.8 billion, as well as a retail free cash flow between its guidance range of £1.4 billion to £1.8 billion.
The retailer also highlighted that it had ‘strengthened’ its offer to customers, and said it had made it more ‘efficient and more digitally capable’, which it said helped with ‘establishing a strong foundation for future growth’.
