Tesco reveals strong food performance in 2016/17 preliminary results
Tesco has reported strong preliminary results for this year, with group sales marking a 4.3% increase to £49.9 billion, compared to the year before.
Tesco has reported strong food performance in its 2016/17 preliminary results.
The group’s like-for-like sales in the UK were up by 0.9% in 2016/17, allowing it to enjoy its first full-year growth since 2009/10. Like-for-like sales in its food division also jumped 1.3%, while the group reported a positive volume growth in both UK and the Republic of Ireland, as well as internationally.
In addition, group operating profit before exceptional items was lifted by 30% to £1,280 million and net debt was decreased by 27%, at £3.7 billion.
Profits before tax took a hit this year, following Tesco’s agreement with the Serious Fraud Office to pay a £235 million penalty, peaking at £145 million, compared to £202 million the year before. However, revenue was up 3.7%, at £55.9 billion, compared to £53.9 billion the year before.
According to the statement, growth in sales, volume and profit, excluding exceptional items and fuel, was aided by ‘six strategic drivers’ that the group had outlined for that period, including brand health, cost savings, retail operating cash, a more efficient mix across channels and products, and a released £0.5 billion value from property.
Brand health reported its strongest level in five years, according to YouGov’s BrandIndex for February 2017. The group highlighted that it focused on further improvments in core offers, including a £300 million investment in seven exclusive fresh food brands in March 2016, which it said contributed ‘to sustained market outperformance in fresh food’.
The report also added that the price of a ‘typical basket’ was down 6% since September 2014, while promotional participation also marked a 32% decrease.
According to the statement, food donations were also up by 148%, as the company’s FareShare FoodCloud is now part of ‘all large UK stores’.
Tesco’s chief executive Dave Lewis noted: “Today our prices are lower, our range is simpler and our service and availability have never been better. Our exclusive fresh food brands have strengthened our value proposition and our food quality perception is at its highest level for five years.”
Commenting on the group’s recently proposed merger with Booker, Lewis added: “On top of this, our proposed merger with Booker will bring together two complementary businesses, driving additional value for shareholders by realising substantial synergies and enabling us to access the faster growing ‘out of home’ food market.”
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