Retail Insight Network

Daily Newsletter

06 October 2023

Daily Newsletter

Tesco posts 8.9% sales growth in H1 23/24

The retailer expects retail adjusted operating profit to be between £2.6bn and £2.7bn in FY23/24.

UK-based supermarket chain Tesco has reported £30.74bn ($37.12bn) in group sales in the first half (H1) of fiscal year (FY) 2023/24, up 8.9% at actual rates from £28.24bn ($34.10bn) in H1 22/23.

During the period, UK and Republic of Ireland (ROI) like-for-like (LFL) sales increased 8.4%, with 8.7% growth in the UK and 6.9% in ROI.

The adjusted operating profit of the company grew by 14.0% to £1.48bn in H1 FY23/24. Meanwhile, its retail business registered an adjusted operating profit of £1.41bn, up 13.5% at constant rates compared with the same period a year ago.

Within retail, UK & ROI adjusted operating profit increased 17.2% to £1.37bn and Central Europe posted a 41.8% decline in adjusted operating profit over the period.

Tesco posted a statutory operating profit of £1.48bn in H1 FY23/24, up 105.5% from £721m in the prior year period.

Its profit before tax (PBT) grew 207.3% to £1.21bn.

The retailer’s statutory diluted earnings per share (EPS) for the period were 12.83p, against 3.27p in H1 FY22/23.

For the full year of FY23/24, Tesco expects its retail business to deliver adjusted operating profit between £2.6bn and £2.7bn.

Tesco chief executive Ken Murphy said: “We know how challenging it is for many households across the country as they continue to grapple with ongoing cost of living pressures. We are committed to doing everything we can to drive down food bills and Tesco is now consistently the cheapest full-line grocer.

“Our investments in value and in improving more than 1,100 own-brand products, from pasta to fresh fish, are helping us to offer outstanding quality at great prices, all underpinned by market-leading availability. Customers are responding well, contributing to market share gains in-store and online.

“We’re seeing the results at both ends of the basket, with strong growth in our Finest range as shoppers look to save by treating themselves at home, voting with their feet as they switch from premium retailers to Tesco.”

In July this year, Tesco reduced the prices of more than 500 household essentials, summer favourites and healthy foods.

Luxury goods, digitalization, and personalization identified as key drivers of the duty-free retail market

Per GlobalData, the global duty-free market retailing market was valued at $49 billion in 2022, its highest level ever as it bounced back from the pandemic impact, and is expected to grow at a CAGR of more than 28% during the period 2020-2026, driven by government initiatives, rising passenger numbers, major global events (for instance global sporting tournaments) and the renewed popularity of cruise trips. Infrastructure investments will also play an important role, particularly airport expansion and space refurbishment, and investments in arrivals duty-free formats.