Tesco has reported a surge in both profits and sales for the full year and hailed a surge in market share gains as inflationary pressures “lessened substantially”.

Tesco Clubcard app

Tesco posted an 11% rise in adjusted retail operating profit to reach £2.76bn for the 52 weeks to February 24, 2024, versus the total of £2.5bn last year.

The UK supermarket giant also recorded a 7.4% increase in group sales year on year to reach £61.48bn, while retail like-for-like sales were also up 6.8%.

Tesco said its “unique” customer offer of the Aldi Price Match, Low Everyday Prices and Clubcard deals means it has remained the “cheapest full-line grocer” for 16 consecutive months.

During the year, Tesco made a net increase of 87 stores and also invested in 389 store “refreshments”.

The supermarket giant also rolled out its largest increase in colleague pay in its history, as well as launching a series of new employee benefits.

In terms of outlook, Tesco said it expects retail adjusted operating profit to edge up and reach “at least” £2.8bn during the 2024/2025 financial year.

Investing in prices

Tesco chief executive Ken Murphy said: “This strong performance reflects the hard work of colleagues across the whole Tesco Group, and their commitment to serving our customers. 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 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 and have now been the cheapest full-line grocer for well over a year. 

“We have continued to invest in helping customers where it matters most, cutting prices on more than 4,000 products and doubling down on our powerful combination of Aldi Price Match, Low Everyday Prices and Clubcard Prices. Customer perception of the quality of our products is growing ahead of the market and we continue to win customers from premium retailers, with sales of Tesco Finest now exceeding £2bn.

“We have strong momentum in our business, and are encouraged by signs of improving consumer sentiment.  We’re excited about the opportunities ahead, with the right plans to keep winning with customers, as well as a great team to deliver them.”