Tesco is expected to reveal a drop in profits for the past 12 months as the supermarket continued to battle rising food and drink inflation.
The UK’s largest retailer will be releasing its annual financial update to February 2023 on Thursday 13 April, in which it will update investors on its performance.
Several analysts have said that Tesco is due to reveal a strong rise in sales, but lower profits due to the challenging backdrop for rising costs.
It is predicted to unveil a group adjusted operating profit of £2.6 billion for the year, which would be down from £2.8 billion a year earlier.
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It comes as Tesco is looking to ease supplier concerns over the ongoing row caused by its fulfilment fee proposals.
It’s profitability has been hit by rocketing energy prices and higher labour costs over the past year.
Food and non-alcoholic drinks prices rose by 18% year on year in February, according to the Office for National Statistics (ONS).
Furthermore, the UK Consumer Price Index (CPI) inflation saw an increase to 10.4% in February due to increased pressure on food prices, which worsened as a result of recent fruit and vegetable shortages.
With continued growth of German discounter rivals Aldi and Lidl, the retailer has committed to keeping prices low to remain as competitive as possible.
Earlier this year, the supermarket extended its Aldi price-match campaign as it ramps up its ongoing campaign to win customers back from the German discounters.
Tesco bosses will also have an opportunity to keep shareholders updated on its current strategy, which saw a management overhaul announced in January which cut around 2,100 jobs.
Additionally, the group announced it was reviewing the future of its banking arm in February.
“As the market leader, the group has market share of over 27% but, because of tough conditions, supermarkets like Aldi are enticing new customers,” said lead equity analyst at Hargreaves Lansdown, Sophie Lund-Yates.
“We don’t expect the league tables to be upended. But it will be important to assess if Tesco’s share has been nibbled away at, which would suggest consumer pressure is higher than previously thought.”
