Tesco, the UK’s largest retailer, has reported a 28% increase in operating profits for its 2017-2018 financial year to £1.6bn (€1.9bn). Pre-tax profits in the business increased eightfold during the 12-month period to the end of February to reach £1.3bn (€1.5bn).

The strong increase in profits at Tesco is down to strong margin recovery in the business. Profit margins at Tesco for the 2016-2017 financial year were tight at 1.8% as the retailer continued to fend off stiff competition from discounter rivals. However, for its 2017-2018 financial year, Tesco has widened profit margins to a healthier 3%, with strong profit growth recorded in its UK and Ireland stores (+31%), as well as at its stores in central Europe (+105%).

Tesco reported a 3% increase in full-year sales to £57.5bn (€66bn), with food sales performing very strongly despite challenging market conditions due to cost price inflation. Tesco said it was working hard with suppliers to mitigate price increases wherever possible and had made a “significant investment” in the first half of the year to hold back inflation.

Tesco chief executive Dave Lewis said it had been another year of strong growth at Tesco. “We have further improved profitability, with Group operating margin reaching 3.0% in the second half. We are generating significant levels of cash and net debt is down by almost £6bn over the last three years,” said Lewis.

Read more

Shoppers spent €20m restocking with groceries after Beast from the East

Country Crest signs €60m vegetable contract with Tesco Ireland