Tesco’s profits have soared 29 per cent despite an “uncertain UK market as the UK’s biggest retailer continues its impressive turnaround.
Chief executive Dave Lewis said there was little sign of customers stockpiling ahead of Brexit and that shoppers were becoming tired with the issue.
His strategy of slashing prices and simplifying the range of products looked to have paid off with revenues up 11.2 per cent to £64bn.
Comparable sales increased 2.9 per cent, with revenues at wholesaler Booker, which Tesco acquired in 2016, jumping 11 per cent.
Mr Lewis said: “After four years we have met or are about to meet the vast majority of our turnaround goals. I’m very confident that we will complete the journey in 2019/20.
“I’m delighted with the broad-based improvement across the business. We have restored our competitiveness for customers – including through the introduction of ‘Exclusively at Tesco’ – and rebuilt a sustainable base of profitability.
“I’m pleased that we are able to accelerate the recovery in the dividend as a result of our continued capital discipline and strong improvement in cash profitability.”
The group issued a final dividend of 4.1p, giving a full-year return of 5.77p per share.
The results come at a difficult time for the retail sector as consumer confidence takes a knock from Brexit worries.
In addition, supermarkets are battling rising costs and fierce competition in the sector as Lidl and Aldi continue their relentless march.
Sainsbury’s and Asda have also agreed to merge, but are awaiting the competition watchdog’s approval.
As part of efforts to position Tesco to meet the challenges of a rapidly changing market, Mr Lewis forked out £3.7 billion to acquire cash-and-carry business Booker and launched Jack’s, a discount chain that will supposedly rival the German discounters.
However, January also saw Tesco announce that up to 9,000 jobs are at risk across its head office and stores as part of a major cost-cutting drive.
PA
