Tesco raises profit outlook amid strong results

After strong sales in the last quarter, Tesco has raised its profit outlook.

Compared to last year sales were up 0.3%, however, compared to pre-pandemic levels sales jumped 8.8%.

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CEO Ken Murphy commented: “We are delighted that we were able to help our customers have a great Christmas.”

“Despite growing cost pressures and supply chain challenges in the industry, we continued to invest to protect availability, doubled down on our commitment to deliver great value and offered our strongest ever festive range.”

“This put us in a strong position to meet customers’ needs as, once again, COVID-19 led to a greater focus on celebrating at home. As a result, we outperformed the market, growing market share and strengthening our value position,” he added.

Richard Lim, CEO at Retail Economics, commented: “The retailer’s single-minded focus on competitive pricing and driving loyalty through its Clubcard-only discounts has won over customers this Christmas. The use of Clubcard has been a masterstroke from the retailer, enhancing the perception of value and playing on the hugely powerful customer instinct of FOMO – the fear of missing out.

“Online continued to deliver strong gains as a wave of new e-commerce converts stuck to a new way of getting their groceries over Christmas. Sales growth was mightily impressive in the wholesale part of the business with Booker seeing double-digit growth as catering and convenience boosted sales.

“Looking forward, the imminent squeeze on incomes will force many households into recessionary behaviours, trading down to own-brand and shopping around as they look to make budgets stretch that little bit further. Tesco is well placed to win new customers with their laser-like focus on value as they double-down on their Clubcard success.”

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