After a 6.3% drop in 2022/23, Britain’s largest supermarket Tesco (TSCO.L), anticipated flat earnings in its current financial year.
On Thursday, the business, which controls 27% of Britain’s grocery industry, reported a retail adjusted operating profit of 2.49 billion pounds ($3.11 billion) in the year to Feb. 25, in line with the forecast of 2.4-2.5 billion pounds but down from 2.65 billion pounds in 2021/22.
Group revenues grew 5.3% to 57.6 billion pounds.
“It’s been an incredibly tough year for many of our customers, and we have been determined to do everything we can to help,” said Chief Executive Ken Murphy.
“Unprecedented levels of inflation in the prices we have paid our suppliers” prompted the business to commit to keeping consumer prices low.
It predicted retail free cash flow of 1.4-1.8 billion pounds and bank division adjusted operating profit of 130-160 million pounds.
Rising inflation has outpaced salary growth for most British employees for almost a year, pressuring consumers. Last month, government experts predicted the worst two-year living normal contraction since 1950.
Official UK consumer price inflation was 10.4% in February. However, industry data shows supermarket inflation hit a record 17.5% in March.
Higher taxes, interest rates, and electricity and mobile phone costs are straining household finances.
Tesco benefits from individuals cooking and partying at home to save money.
Fourth-quarter UK like-for-like sales grew 7.6% after rising 4.3% in the third quarter.
Monthly industry data shows Tesco outperforming its conventional rivals, but it is still losing market share to German discounters Aldi and Lidl, which are opening many new stores.
Tesco will buy back 750 million pounds of shares and pay a 10.9 penny full-year dividend.
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