// Tesco’s full year pre-tax profits have dropped by more than half due to soaring inflationary costs
// The supermarket giant posted group sales excluding fuel rose 5.3% to £57.6m
Tesco has revealed that its pre-tax profits plummeted by more than 50% over the past year, despite maintaining a strong sales performance amid the cost-of-living crisis.
The supermarket giant’s pre-tax profits dropped to £1bn for the year to February, down 50.8% from £2.033bn the previous year.
Group sales excluding fuel edged up 5.3% to £57.6bn. Tesco said sales volumes held up well despite cost-of-living pressures and further post-pandemic normalisation.
Tesco’s retail operating profits slipped 6.1% to £2.49bn driven down by market inflation and ongoing investment into its customer offer.
It said it expects profits to remain flat for the current financial year.
The supermarket chain said it’s ongoing investment into strengthening its customer proposition in a bid to match grocery rivals has seen its “most competitive offer ever”, with Tesco extending its price lock campaign on Wednesday until July.
Subscribe to Retail Gazette for free
Sign up here to get the latest news straight into your inbox each morning
Tesco chief executive Ken Murphy said: “It’s been an incredibly tough year for many of our customers, and we have been determined to do everything we can to help.
“Our results reflect our continued investment in delivering great value and quality for our customers, whilst at the same time looking after our colleagues.
Tesco has invested over £450m into raising staff pay over the past year and in February, raised its rate to over £11 an hour.
“The resilience and agility that we have developed over the last few years has created a sustainable competitive advantage that leaves us well-placed to deal with any challenges that may arise.
“It has enabled us to deliver another strong performance across the group, whilst continuing to make strategic progress.”
The group acquired the Paperchase brand in January and expects to launch the first products in stores later this year.
Click here to sign up to Retail Gazette‘s free daily email newsletter
