Tesco posts surge in profit but Irish like-for-like sales drop 3%

Tesco posts surge in profit but Irish like-for-like sales drop 3%
Tesco has reported a 35.8 per cent rise in annual profit but forecast that profit is likely to fall in the current year given the tough external environment.

In the Republic, the retailer reported a 2.9 per cent decline in like-for-like sales to just under £2.5 billion. However, it noted this was up 10.6 per cent compared to the same time two years ago.

“The Covid-19 impact was particularly strong in ROI as the restrictions on hospitality were in place for a longer period than in the UK,” the company said.

It said its like-for-like sales in the Republic grew by 0.3 per cent over Christmas and it gained market share in the fourth quarter.

The company’s Irish online business grew by 3.1 per cent on a one-year basis and now represents 8 per cent of its sales, it said.

Tesco, which has an over 27 per cent share of Britain’s grocery market, said on Wednesday it made retail adjusted operating profit of £2.65 billion in the year to February 26th, in line with guidance of slightly above £2.6 billion and up from £1.96 billion in 2020-21.

It saw group sales excluding fuel rise 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.

Tesco chief executive Ken Murphy said: “Clearly, the external environment has become more challenging in recent months. Against a tough backdrop for our customers and with household budgets under pressure, we are laser-focused on keeping the cost of the weekly shop in check — working in close partnership with our suppliers, as well as doing everything we can to reduce our own costs.”

“Through our powerful combination of Aldi Price Match, Low Everyday Prices and Clubcard Prices, we are making more products more affordable, in more places than anyone else,” he said.