Tesco Raises Annual Profit Forecast as Consumer Confidence Holds
Tesco lifted its annual profit forecast after reporting resilient consumer confidence and higher first-half underlying profit, helped by online and premium own-label sales.
Tesco, the UK’s biggest grocer, said sales rose just 2% to £33.8bn in the first six months of its financial year, while underlying profit rose 6.5% to £1.8bn. Chief executive Ken Murphy said growth was helped by online sales, up 8%, and a 9% jump in revenue from its premium own-label Finest range.
The company added: “While consumer confidence has remained relatively resilient in the first half of the year, ongoing geopolitical tensions continue to create uncertainty and we remain focused on helping customers get the best possible value from their weekly shop.”
Tesco said it now expected underlying annual profits of between £3.15bn and £3.3bn, an upgrade from its previous expectation of at least £3bn. The bottom end of the range would still mark a fall from a year earlier.
Sales at established UK Tesco stores were up 1.5% as food sales motored, but the group’s Booker wholesale arm continued to have difficulties, with sales falling 2.6%.
The supermarket said it was increasingly using artificial intelligence across the business, including a meal planning assistant that was tested from April with 280,000 staff before being launched for customers in September. It said AI was also helping save costs by making in-store replenishment more efficient and improving energy efficiency in its supermarkets.