// Tesco’s pre-tax profits fell by almost 20% to £825 million
// It said profits were weighed down by £892 million in Covid-related costs
// The grocer took a £535m hit on business rates relief handed back to the government
Tesco has revealed that its pre-tax profits tumbled by almost 20 per cent to £825 million over the past year, despite unveiling a jump in sales during the pandemic.
The grocer stated that Covid-related costs of almost £900 million offset surging sales.
Tesco said group sales excluding fuel increased by seven per cent to £53.4 billion for the year to February, driven by soaring online sales.
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In its core UK and Ireland market, Tesco’s full-year sales grew 8.6 per cent £48.8 billion.
Online sales jumped by 77 per cent to £6.3 billion in the UK as the Big 4 grocer doubled delivery capacity to meet rising demand from housebound customers due to lockdowns.
“Tesco has shown incredible strength and agility throughout the pandemic,” Tesco chief executive Ken Murphy said.
Tesco said this morning that pre-tax profits slid 19.7 per cent to £825 million for the 12 months to February, compared with £1.03 billion recorded the previous year.
It said profits were weighed down by £892 million in Covid-related costs and the retailer’s decision to hand £585 million in business rates relief back to the government.
The bumper bill of pandemic costs was also driven by hiring staff to cover workers impacted by Covid-19 and investment in safety in stores.
Tesco hired almost 50,000 temporary workers during the pandemic, about 20,000 of whom have joined the retailer permanently.
“By putting our customers and colleagues first, we have built a stronger business,” Murphy said.
“While the pandemic is not yet over, we’re well-placed to build on the momentum in our business.
“We have strengthened our brand, increased customer satisfaction and improved value perception.”
Tesco added that that it pumped significant investment into keeping its prices low in a bid to match its discount rivals, with Tesco launching its Aldi Price Match campaign last year.
It said it has made progress in the “value perception” among customers as a result.