Tesco CEO Ken Murphy has insisted the retailer is getting the “balance right” in terms of helping customers through the cost of living crisis while also increasing pay for staff and supporting suppliers.
The Tesco boss was speaking as the UK’s biggest grocer posted a 5.3% increase in group sales to £57.7bn for the year to 25 February. Despite a 7.1% fall in adjusted operating profit to £2.63bn Tesco still faced accusations of profiteering and not doing enough to help customers.
“These results show Tesco is doing very well during the cost of living crisis while millions of its customers struggle to put food on the table due to soaring grocery price inflation,” said Sue Davies, head of food policy at Which?
“It’s clear that Tesco and all the major supermarkets could be working harder to make food more affordable for customers who need help.”
Sharon Graham, general secretary of the Unite union added: “Tesco’s profits are another example of excessive profiteering fired up by astonishing corporate greed. It’s this rampant profiteering which is driving inflation, and cranking up the cost of living crisis for workers and their families.”
Murphy said: “Operating profits fell by 7.1% and this was in a year we had a record level of cost savings. We have worked very hard for our customers this financial year.
“We’ve got the balance right this year at the same time looking after our colleagues with a 15% pay rise over the last 18 months and supporting our suppliers.”
Tesco said it had recorded a record supplier satisfaction score of 86.6% during the year and has ranked number one in the Advantage supplier survey for seventh consecutive year.
A “meaningful number” of suppliers had agreed to Tesco’s controversial new fulfilment fees for online ordering and supply to Booker’s independent retailers, Murphy added.
“I think there has been an acceptance from suppliers they have had a free ride when it comes to online fulfilment for a number of years,” he said. “We are having good quality conversations with suppliers and are confident that it will be successful.”
The supermarket giant posted statutory profit before tax of £1bn in the year to 26 February, down 51% from just over £2bn in the previous year.
Group statutory operating profit reduced by 40.4% year on year due to a sharp increase in adjusting items, with the key driver being a £982m non-cash impairment charge on non-current assets – primarily property – mainly due to an increase in interest rates.
Overall retail like-for-like sales were up 5.1%, with statutory revenue up 7.2% to £65.7bn and including fuel sales up 23.3%.
UK & ROI like-for-like sales were up 4.7%, including UK up 3.3%, ROI up 3.3% and Booker up 12% in the period.
UK like-for-like sales grew by 3.3%, with particularly strong growth of 7.2% across the six-week Christmas trading period.
In the first half, like-for-like sales grew by 0.7%, reflecting reduced year-on-year volumes due to higher levels of in-home consumption in the prior year, with growth accelerating in the second half, with like-for-like sales of 6%, driven by rising levels of general market inflation and strong demand in the fourth quarter, particularly during the key Christmas trading period.
Food sales grew by 4.6% for the full year, with own-brand volume participation increasing.
No comments yet