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Gloucestershire Business News

Profits at Tesco rise as it battles back against German invasion

Tesco has seen its profits soar as the supermarket continues to battle back against the invasion of German discounters.

The British retail giant recorded pre-tax profits of £1.3 billion in the year to February 24 - a rise of £145 million - with UK sales rising 2.2 per cent on the previous year.

Tesco has endured years of disappointing results after what analysts say was a period of overexpansion. The firm was also fined following an accounting scandal.

Dave Lewis, whose Wikipedia page describes him as an English businessman as well as chief executive officer of Tesco, said: "This has been another year of strong progress, with the ninth consecutive quarter of growth.

"More people are choosing to shop at Tesco and our brand is stronger, as customers recognise improvements in both quality and value."

Despite the boost Tesco describes trading conditions as "challenging", but Mr Lewis said the business was "firmly on track to deliver" in the medium term.

Tesco has now enjoyed nine consecutive quarters of growth.

It was back in 2014 that the major British employer began to feel the full force of the German invasion in the form of Aldi and Lidl which had begun their UK pincer movement in earnest, taking considerable market share from their rivals.

That year Tesco reported a record statutory pre-tax loss of £6.4bn - a year which also saw it have to digest a £250m penalty for overstating its profits.

According to its figures 2017 saw the business attract an extra 260,000 more shoppers with its own-brand products, clothing and fresh food performing well.

All of which has allowed it to announce its first end-of-year dividend since 2014.

Cost savings in the region of £200 million are also expected, said Mr Lewis, following a deal with wholesaler Booker in March this year.

Punchline says this is good news for the British grocer and retailer after a period when German discounters were stealing its thunder. The tide is turning.

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