Supermarket says it is in a healthy position as market competitiveness hots up
Tesco has toasted its “most competitive position and highest market share for many years” despite acknowledging an increasingly competitive UK market.
In its preliminary results for 2024/25, the grocery market leader reported group sales, excluding VAT and fuel, of £63.6 billion, which is a 3.5 per cent rise on the previous year.
Adjusted operating profits were up 10.6 per cent at constant rates to £3.1bn, which the business put down to further progress in its core retail markets as higher sales volumes and a further £510 million contribution from Save to Invest more than offset net operating cost inflation.
Chief executive Ken Murphy noted that the company’s focus on value and quality, coupled with market-leading availability, contributed to increased customer satisfaction and its 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 per cent,” Murphy said.
He added that Tesco is making significant progress on its long-term growth opportunities, further enhancing its digital capabilities with increased personalisation, improving the online experience, and expanding its retail media offering.
Part of Tesco’s plan has involved product innovation, the supermarket said, and over the year it launched 1,000 new products and improved more than 600.
Sales of Finest lines also had a good year, rising 15 per cent and hitting annual sales of £2.5bn. Some 400 new products were launched into the premium range in the period.
Looking ahead, Tesco said it was well placed due to its disciplined approach to capital, which has led to strong cash generation and shareholder returns.
It also noted: “In the last few months, we have seen a further increase in the competitive intensity of the UK market. We are committed to ensuring that customers get the best value in the market by shopping at Tesco and we see further opportunities to protect and strengthen our competitiveness.”
Strategic priorities going forward include a focus on offering great value, quality and convenience while rewarding loyalty, it added.
