Profits Fall at Tesco but Sales on The Up
05 Oct 2016 --- Profits at Tesco shrunk 28 percent year-on-year to £71m ($90m) but the UK's biggest supermarket has reported a rise in sales. Like-for-like sales, which take out the impact of new store opening, were up one percent in the first half to August 27 at Tesco.
The 28 percent fall in profits was mainly due to one off costs, said Tesco, which has now reported three consecutive quarters of sales growth under Dave Lewis, chief executive, who took over the leadership in 2014 amid falling sales at Tesco.
Lewis highlighted that a strategy to cut costs by £1.5bn ($1.9bn) over the next three years to invest in its customer offering would help improve profits.
Lewis said: "We have made further strong progress in the first half, with positive like-for-like sales growth across all parts of the Group as we re-invest in our customer offer whilst rebuilding profitability in a sustainable way.”
“The entire Tesco team is focused on serving shoppers a little better every day. We are more competitive across our offer. Prices are more than 6% lower than two years ago, availability and service have never been better and our range is more compelling.”
“Our new fresh food brands are performing ahead of expectations, improving our value proposition and further removing reasons for customers to shop elsewhere.”
“Whilst the market is uncertain, we have made significant progress against the priorities we set out two years ago, stabilising the business and positioning us well for the future.”
“Today, we are sharing the plans we have in place to become even more competitive for our customers, even simpler for colleagues and an even better partner for our suppliers, whilst creating long-term, sustainable value for our shareholders."
Tesco- and rivals Sainsbury, Morrisons and Asda- are engaged in with a price war against discounters Aldi and Lidl.
Tesco is looking to improve its UK shopping experience and is also looking to improve transparency amid an accounting scandal which remains subject of a Serious Fraud Office investigation.
