Tesco published its financial results for 2022 today, revealing that its profits have dropped by 50% from £2 billion to £1 billion for the year as customers continue to cut costs and focus on value.
Though it maintained a strong sales performance amid rising inflation, the UK’s largest retailer saw its pre-tax profits fall to £1 billion to February 2023, down 50.8% from £2.033 billion the previous year.
Group sales excluding fuel edged up 5.3% to £57.6billion, in which it noted that sales volumes held up well despite ‘cost-of-living pressures and further post-pandemic normalisation.’
Tesco said it has been shielding its customers from the worst of the cost-of-living crisis – while competing with discount rivals Aldi and Lidl – adding that its ongoing investment into strengthening its customer proposition has seen its “most competitive offer ever.”
It’s retail operating profits slipped 6.1% to £2.49 million, driven down by market inflation and ongoing investment into its customer offering.
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The retailer extended its price lock campaign recently and also made its biggest ever investment in pay of over £450 million, with UK store colleagues now paid £11.02 per hour with access to additional colleague benefits.
“It’s been an incredibly tough year for many of our customers, and we have been determined to do everything we can to help,” Tesco chief executive Ken Murphy said.
“Our results reflect our continued investment in delivering great value and quality for our customers, whilst at the same time looking after our colleagues.
“The resilience and agility that we have developed over the last few years has created a sustainable competitive advantage that leaves us well-placed to deal with any challenges that may arise.
“It has enabled us to deliver another strong performance across the Group, whilst continuing to make strategic progress.
He concluded: “I am really confident that by investing to give customers the best possible value and continuing to look after our colleagues, we will create further significant value for every stakeholder in Tesco.”