Tesco, the UK’s largest retailer, has reported a 27% increase in half-year operating profits to £759m (€856m) as profit margins widened 50 basis points to 2.7%. The retailer reported sales (excluding fuel) of £25.2bn (€28.4bn), with like-for-like sales growing just 0.8%.
Tesco sales in the UK and Ireland increased 2.1% to a little over £19bn (€21.5bn), while operating profits increased more than 20% to £471m (€530m). In Ireland, Tesco reported like-for-like sales growth of 1.1% as investment in price reductions helped sales volumes grow almost 4% in the six-month period.
In the UK, the retailer’s most important market, Tesco reported like-for-like sales growth of 2.2%, which is mainly as a result of food price inflation due to a weakened sterling. Sales volumes in the period grew a sluggish 0.3%.
From the perspective of the Irish meat sector, it was interesting to note that Tesco is seeing strong growth in meat sales so far this year. For the six-month period, meat sales volumes increased 6% and outperformed the wider market. Tesco chief executive Dave Lewis said the business continues to make progress since he started a turnaround strategy three years ago.