Tesco has said it expects next year’s profits to be lower after recording its highest market share in nearly a decade.
The supermarket saw its full-year group sales increase 3.5% to reach £63.6bn, up from £61.4bn.
In the 52 weeks to February 22, 2025, group adjusted operating profit grew 10.6% from £2.8bn to £3.1bn.
UK sales grew 4% on a like-for-like basis to £47.4bn, while Republic of Ireland sales grew 4.6% to just under £3bn.
Food like-for-like sales grew 4.9% as its volume growth was supported by “ongoing investments in product quality and innovation”.
Clothing like-for-like sales increased 3% due to a strong performance in womenswear and the development of F&F ranges.
Home like-for-like sales dropped 2.2%, while online sales leapt 10.2%.
Tesco’s UK market share increased 67 basis points to 28.3% – its highest level since 2016.
The supermarket said it has seen an “increase in the competitive intensity of the UK market” but there are further opportunities to “protect and strengthen” its competitiveness.
It added that its guidance allows “flexibility and firepower” to deal with current market conditions.
It expects group adjusted operating profit to be between £2.7bn and £3bn next financial year.
Tesco chief executive Ken Murphy said: “Our continued focus on value and quality, coupled with market-leading availability, has contributed to another year of increased customer satisfaction and our highest market share for nearly a decade. We have invested in bringing great prices to our customers throughout the year and continued to innovate with over 1,600 new or improved products including 400 new Finest lines, where overall sales grew 15%.
“We are also making significant progress on our long-term growth opportunities, further enhancing our digital capabilities with increased personalisation, further improvements to our online experience and an expanded retail media offering.
“None of this would be possible without the dedication of our 340,000 colleagues and I want to thank them for all their hard work. We continue to invest in our market-leading package of colleague benefits, including over £900m in pay increases across the last three years.
“Building on our strong financial performance, robust balance sheet and positive momentum, we are setting ourselves up for the year ahead with the flexibility to continue to win in a highly competitive market. Despite inflationary headwinds, we are committed to ensuring customers get the best possible value by shopping at Tesco and see further opportunities to strengthen our competitiveness. By putting customers first, we will continue to create sustainable value for every stakeholder in Tesco.”
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