Tesco: supermarket giant prepares to announce bumper profits after record Christmas sales

Supermarket giant Tesco is set to announce bumper profits after shoppers flocked to stores over the Christmas period leading to record sales.

The supermarket noted a 6.8% increase in sales in the six weeks to January 2024 year-on-year. Like-for-like retail sales also rose by 6% compared to the 2022 Christmas period.

Tesco bosses have pointed towards the use of investment to keep prices low as a reason for urging shoppers to use the supermarket. Prices were cut on "nearly 2,700" products", according to the retailer, as an incentive to stop customers from choosing budget supermarkets such as Aldi or Lidl. It comes after Tesco also reported an increase of 6.6% over the 13 week period until November 25.

Ken Murphy, chief executive of the retailer, said: “The Tesco team has worked harder than ever to help customers celebrate this Christmas, with our strongest ever range of great value, fantastic quality food. Our powerful combination of great value, quality, availability and service means that we head into the new year in great shape to keep delivering for customers.”

Tesco has now said that it expected bigger-than-projected profits as a result of the healthy Christmas sales. A retail-adjusted operating profit of £2.75billion is now expected, slightly up from the previously forecast range of between £2.6bn and £2.7bn.

Mr Murphy delivered good news for shoppers, saying that he expected food inflation to “continue to moderate” throughout 2024. However, he also warned that there may still be some inflationary pressure on some items due to labour costs in the food supply chain.