Tesco has today (12.4.17) released preliminary results for 2016/17 and announced the chain's first full-year growth since 2009/10, with UK food like-for-like sales up 1.3%.
Tesco reported that their £300m investment in to their ‘farm brands’ has been a key contributor to sustained market out-performance in fresh food. However, pre-tax profits fell 28.2% from £202m due to an exceptional charge of £129m by the Serious Fraud Office relating back to the accounting scandal in 2014.
The UK’s largest retailers has reported the price of typical basket is down 6% since Sept 2014, alongside availability at a record high and staff helpfulness at 80%, Tesco is committed to be completely focused on continuing to grow.
The retailer has been finding ways to cut costs in light of Brexit, to reduce the amount of rising inflation being passed on to its customers. This includes a reduction in property investment, closure of 69 of its UK stores and turning some of its larger stores away from 24h opening, in a bid to cut costs.
Tesco’s international businesses has also shown a growth of 1.3%, contributed to by a strong performance in Asia last year, although the increasingly competitive market in Europe weakened growth in the second half of the year.
With some speculation around the Tesco Booker merger announced on the 27th January 2017, Tesco have said the ‘proposed merger with Booker is to enable access to a larger, faster-growing market opportunity’.
CEO, Dave Lewis said, “We are ahead of where we expected to be at this stage, having made good progress on all six of the strategic drivers we shared in October. We are confident that we can build on this strong performance in the year ahead, making further progress towards our medium-term ambitions.”
NFU President Meurig Raymond said: “It is clear that Tesco have turned a corner with customers and we would like to see this replicated in the agricultural sector. NFU Director General Terry Jones and I are meeting with senior representatives at Tesco next week to discuss their future plans for agriculture.
“As we see inflation at the shelf-edge, it is vital that we understand what this means for farmers and growers. Rising prices do not automatically mean that more money will come back to the farm gate. The NFU is also keen to understand more about the merger with Booker and how it will impact Tesco’s opportunity to increase their British sourcing and the Tesco Dairy Group.”