The supermarket has outlined new plans to shift focus to sustainability, value products, increasing customer loyalty and online shopping.
In its 2020/2021 end-of-year financial summary, Tesco has reported exceptionally strong sales during the pandemic year, but revealed that profits took a hit due to £892m of COVID-19 related costs.
The retailer saw group sales increase by 7.1% to £53.4bn when compared with the previous year, which helped it to grow UK market share by 0.2%, for the first time since 2016.
COVID-related costs included £58m spent on safety equipment, £369m on staffing and £173m on bonuses for frontline colleagues.
Going forward, the supermarket plans to focus on improving sustainability and driving custom through its value offering and online platform.
To date, Tesco has reduced its GHG emissions by 54% compared to its 2015 baseline. It has been the first European retailer to report against the sustainability accounting standards board. It has also brought forward its UK emissions commitment and has pledged to be net zero by 2035, which is 15 years ahead of its original target.
Tesco has said that it understands it must help suppliers to reduce emissions. The retailer has pledged that it will reduce its agricultural emissions by 15% by 2030, stating that reductions can be made through improvements in efficiency and innovation.
It is collaborating on technologies that will reduce emissions from the largest areas, such as low-carbon fertilisers, methane-reducing feeds and alternative feed types, such as protein from insects.
The retailer has also worked with suppliers to remove 1 billion items of plastic from its supply chains and UK business.
It has also worked to reduce the amount of food waste that is created from its business by redistributing 82% of surplus food, which it says is a 5% year-on-year increase.
Tesco CEO Ken Murphy said:
“Sustainability is now an integral part of our business strategy and we’re doubling down on our efforts to reach net zero.”
Further information featured in the latest Tesco report included:
- The future of the food shop - online
In the past year, online became a fast-growing section of Tesco’s business, with the pandemic and governments stay-at-home message.
The retailer responded to the stay-at-home message by doubling slot availability, meaning there are now 1.5 million delivery slots available each week. This has helped Tesco to grow online sales by 77%, reaching £6.3bn.
The company's Click and Collect service equates to 25% of online sales, which is an 11% increase since March 2020.
- Improving customer loyalty
Tesco has worked on improving and increasing everyday low prices for shoppers through price match and Clubcard price schemes. The Clubcard price scheme is a price reduction on select products for shoppers who have a Tesco Clubcard; those who do not have a Clubcard scanned at the till have to pay full price for the item.