Tesco: UK supermarket giant announces bumper profits as bosses hail easing shop price inflation

UK supermarket Tesco has announced huge bumper profits and sales over the past year as bosses say price inflation has eased for shoppers.

Profits for the supermarket giant, which enjoys a 27.3% market share, grew to £2.3bn from the year to February 24, compared to £882m the year before. Sales also grew by 4.4% to £68.2bn.

Chief executive Ken Murphy said that the increase came as inflationary pressures on shoppers eased. Tesco, along with other supermarkets in the UK, invested heavily in price improvements to battle strong price competition from German brands Aldi and Lidl.

Mr Murphy said: “Customers are choosing to shop more at Tesco, which is reflected in growing market share as they respond to the improvements we’ve made to the value and quality of our products. Inflationary pressures have lessened substantially; however, we are conscious that things are still difficult for many customers, so we have worked hard to reduce prices and have now been the cheapest full-line grocer for well over a year.”

Shareholders were told that around 4,000 prices were cut in a bid to compete with discount retailers. The latest reporting also showed that like-for-like sales also increased by 6.8% while fuel sales decreased by 17.2%, owed in part due to falling petrol and diesel prices.

Mr Murphy added that the company expected food inflation to stabilise in the “low single digits for the rest of the year”, meaning that pressures will remain eased for customers. However, there were warnings that price increases across some cupboard staples such as coffee and potatoes may be “sticky”