Tesco warns profits could fall amid Iran war uncertainty | Tesco
Tesco has warned that profits could fall next year due to “increasing uncertainty caused by conflict in the Middle East”.
The warning comes after Britain’s biggest supermarket achieved its highest market share in a decade.
It revealed profits rose 8.5% to £2.4bn on 28 February as sales rose 4.3% to £66.6bn, including strong growth in the UK.
The retailer paid £65 million of ‘special performance awards’ to shop floor, distribution workers and other frontline staff in light of the results, while shareholders received £937 million in dividends during the year.
But the company said it had “broadened” its guidance for next year’s profits from £3bn to £3.3bn, adding: “This will depend on the duration of the conflict and its potential impacts on UK households in particular and the economy more broadly.”
Tesco chief executive Ken Murphy said it had won more customers as it “increased our investment to keep prices low, further improve quality and deliver better service despite cost pressures from new regulation”.
He said there had been an “increase in the intensity of competition” in the UK, with Tesco ensuring more than 10,000 of its products were cheaper at the end of the year than they were at the start, despite market-wide grocery price inflation.
He said the supermarket chain was “committed to doing all we can to reduce the cost of the weekly shop, and that commitment is more important than ever as the conflict in the Middle East creates further uncertainty for consumers and the wider economy.”
Tesco said it aims to make new savings of £500 million next year. This will involve greater use of AI and AI-led finance tools to help determine when and how to reduce prices.
