// Tesco lifts its profit targets for the year on the back of a “strong” half-year of sales
// In the six months to August 28, group sales rose by 3% to £27.3 billion
Tesco has raised its full year profit guidance after seeing a better than expected increase in first half sales as it continued to benefit from strong trading as a result of the Covid-19 pandemic.
The supermarket giant doubled profits in the first half of the year as it reduced Covid related costs and said its strong supply chain had kept shelves stocked despite widespread delivery problems across the industry.
Sales rose three per cent to £27.3 billion in the six months to August 28 and profits soared by 107 per cent to £1.1 billion.
Tesco chief executive Ken Murphy said: “We’ve had a strong six months; sales and profit have grown ahead of expectations, and we’ve outperformed the market.
“I’m really pleased with our progress as we increased customer satisfaction and grew market share leading to a strong financial performance. With various different challenges currently affecting the industry, the resilience of our supply chain and the depth of our supplier partnerships has once again been shown to be a key asset.”
Sales in the UK were buoyant with like-for-like sales rising by 1.2 per cent as the retailer expanded its Aldi Price Match exercise to around 650 products.
It also strengthened its digital platform which helped online like-for-like sales to rise by 2.3 per cent.
Tesco lifted its adjusted operating profit target for the year to between £2.5 billion and £2.6 billion as a result, as it said it “outperformed” its competition.
Murphy added: “Today, we are sharing the strategic priorities that will enable us to build on these advantages to stay competitive, accelerate growth and generate between £1.4 billion and £1.8 billion retail free cash flow per year.
“These priorities will ensure we do the basics brilliantly, operate as efficiently as possible and grow our business by building unbeatable digital, convenience and loyalty platforms.”