Big four Supermarket Tesco has adjusted its operating profit to £1.56bn, up 10% on the previous year, as it reports retail LFL sales up 2.9% and 4% growth across the UK.
Ken Murphy, chief executive, Tesco, said: “The combination of price, quality and innovation means we are as competitive as we have ever been, and we have been the cheapest full-line grocer for nearly two years.
“Our strong UK and ROI market share gains across the last year demonstrate our continued momentum. I want to say a big thank you to all my Tesco colleagues for their hard work serving customers so well. As we approach the Christmas season, we are looking forward to sharing the quality of our festive food with customers, and can’t wait for them to taste it.
“We are in good shape, with volume growth delivering strong financial performance. This builds on our track record of delivery for all our stakeholders. Our strong momentum allows us to continue to focus on value, quality, innovation, and the broader customer experience, whilst investing in growth opportunities in a disciplined, returns-focused way.”
A company profile in the recently published RetailX UK 360° report looks at how Tesco became the UK’s largest supermarket.
Tesco was an early adopter of online shopping and launched its Tesco Direct service in 1997. Today, it deals with 1.2mn ecommerce orders in the average week. In 2023, it employed more than 196,000 full-time equivalent employees and sold through 4,169 stores in the UK. Its strategy combines value with the convenience offered by a multichannel sales model.
Value is one of the four pillars of its strategy, alongside its digital loyalty scheme – Tesco Clubcard – a focus on multichannel convenience through store openings and online ordering, a strategy of reducing costs, and investment.
Tesco puts its share of the online market at 34%. In its latest full year, online sales grew by 10.4% and accounted for about 13.1% of total UK sales.
It attributes about two percentage points of that growth to the rollout of its Whoosh rapid online delivery service, now available to an estimated 66% of the population, from 1,424 of its stores. Tesco offers lower prices to members of its Tesco Clubcard digital loyalty scheme and, in its latest financial year, 85% of its sales involved a Clubcard – up by 8pp on the previous year.
The supermarket is using AI technology in areas including range optimisation and in personalisation of Tesco Clubcard offers. It is also working towards net zero carbon emissions across its value chain by 2050, validated by the Science Based Targets Initiative. By 2025, it aims to ensure that healthy products account for 65% of its sales volumes.
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