Tesco failed to accelerate its sales growth in the first half of this year as the UK’s biggest supermarket warned an “uncertain external backdrop” was squeezing shoppers.
The FTSE 100 grocer posted like-for-like sales growth of 0.9 per cent in the second quarter of this year, marking a further slowdown from the previous quarter’s lower-than-expected one per cent growth.
The supermarket giant holds a dominant 27.8 per cent share of the UK’s grocery market, far beyond that of rivals Sainsbury’s and Asda, but has seen its growth falter so far this year.
Last year, Tesco posted 4.6 and four per cent sales growth in the first two quarters of the year, compared to this year’s one per cent growth across the first half.
Chief executive Ken Murphy said the supermarket is focussed on giving customers the best value for money, amid fears that the Iran war could send food prices soaring.
He told shareholders on Thursday: “Against an uncertain external backdrop, we have continued to invest in giving customers the very best value for money.
“Alongside maintaining our strong value proposition, we have continued to innovate across all our ranges, launching over 800 new and improved products during the half.”
The supermarket took £37.4m in revenue in the first half of this year, above analysts’ expectations of £37.2m, as pre-tax profit jumped by 11.5 per cent to £1.5bn.
Tesco is reportedly considering selling off its operations in Hungary, the Czech Republic and Slovakia, which represent the last remnants of the grocer’s once-sprawling global footprint.
Murphy did not comment on the rumours on Thursday, instead pointing to a 38 per cent jump in operating profit across what it calls its central Europe arm, to £63m.
“This reflects volume growth, targeted promotions and better buying, supported by a strong contribution from our Save to Invest programme which helped to offset the impact of cost increases and a stronger competitive landscape,” Tesco’s boss said.
