Tesco has revealed annual profits more than tripled, but warned retail earnings will come under pressure this year from soaring inflation and as shoppers return to pre-pandemic shopping habits. The supermarket giant saw group pre-tax profits jump to £2.03 billion in the year to February 26, up from £636 million the previous year, thanks to rising sales and lower costs related to the pandemic.
It posted a 58 per cent jump in underlying operating profits to £2.8 billion, with retail earnings up 34.9 per cent at £2.6 billion. The group said sales excluding fuel rose by 2.5 per cent to £54.8 billion, with UK like-for-like growth of 0.4 per cent – up 8.2 per cent on a pre-pandemic two-year comparison.
Profits were helped as it saw Covid-19 costs fall to £220 million from £892 million the previous year. But it warned that retail operating profits are expected to fall this year, to between £2.4 billion and £2.6 billion as the group’s own costs are set to soar and it invests in prices to remain competitive amid rocketing food inflation.
