Tesco sees annual sales and profits jump

The UK’s biggest retailer said group sales excluding VAT and fuel rose 7.2% in the 52 weeks to 24 February, to £61.48bn.

Including fuel, sales rose 4.2% to £68.19bn. Fuel sales fell 17.2%, primarily due to reduced retail prices.

On a like-for-like basis, retail sales rose 6.8%. Tesco said inflation had fallen throughout the year, with volume growth seen in the UK and Ireland across the second half.

Retail adjusted operating profit rose 10.9% to £2.76bn, while adjusted operating profits rose nearly 13% to £2.83bn.

On a statutory basis, pre-tax profits were 159.5% higher at £2.29bn, reflecting the previous year’s £982m impairment charge.

Ken Murphy, chief executive, said: "Customers are choosing to shop more at Tesco, which is reflected in growing market share as they respond to the improvements we’ve made to the value and quality of all our products.

"Inflationary pressures have lessened substantially. However, we are conscious that things are still difficult for many customers, so we have worked hard to reduce prices."

Looking ahead, the grocer said it expected retail adjusted operating profit of "at least" £2.8bn for the 2024/25 year. It also forecast retail free cash flow of between £1.4bn and £1.8bn.

Murphy added: "We have strong momentum in our business, and are encouraged by signs of improving customer sentiment.

"We’re excited about the opportunities ahead, with the plans to keep winning with customers."