London Daily

Focus on the big picture.
Friday, May 09, 2025

Tesco profits to come under pressure amid soaring food inflation

Tesco profits to come under pressure amid soaring food inflation

The UK’s largest retailer will update investors and analysts over its financial performance for the year to February next week.
Tesco is expected to reveal a dip in profits for the past year as the supermarket group grappled with rampant food and drink inflation.

The UK’s largest retailer will update investors and analysts over its financial performance for the year to February in an update on Thursday April 13.

A consensus of analysts has said Tesco is due to reveal a strong rise in sales but lower profits due to the challenging backdrop for costs.

It is predicted to unveil a group adjusted operating profit of £2.6 billion for the year, which would be down from £2.8 billion a year earlier.

Profitability has been dented by rocketing energy prices and higher labour costs over the past year.

UK Consumer Price Index (CPI) inflation saw a shock increase to 10.4% in February due to increased pressure on food prices, which worsened as a result of recent fruit and vegetable shortages.

Food and non-alcoholic drinks prices rose by 18% year on year in February, according to the Office for National Statistics (ONS).

Tesco’s buying power will have shielded the group from inflation quite this high but chief executive officer Ken Murphy said at the firm’s previous update in January that it expected more inflation to hit the retailer.

Shareholders will be eager for the company to outline whether its cost inflation is starting to ease back yet or if profits are likely to remain constricted for longer.

Profitability has also been dented by the retailer’s investment in prices to keep customers coming through the door in the face of the continued growth of German discounter rivals Aldi and Lidl.

"As the market leader, the group has market share of over 27% but, because of tough conditions, supermarkets like Aldi are enticing new customers"

The efforts on value have helped support significant sales growth, with revenues expected to have risen to £65.7 billion over the past year from £54.8 billion.

Analysts have suggested that shareholders will be looking for efforts from the company to continue to support its market share amid the volatile economic backdrop.

“As the market leader, the group has market share of over 27% but, because of tough conditions, supermarkets like Aldi are enticing new customers,” said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown.

“We don’t expect the league tables to be upended. But it will be important to assess if Tesco’s share has been nibbled away at, which would suggest consumer pressure is higher than previously thought.”

Bosses at Tesco will also have an opportunity to keep shareholders updated regarding its current strategy, which has seen the company cut further costs, such as through a management overhaul announced in January which cut around 2,100 jobs.

Sky News reported in February that the group was also reviewing the future of its banking arm.
Newsletter

Related Articles

0:00
0:00
Close
Historic Papal Conclave Set to Commence in Rome
Huge Copper, Gold, and Silver Discovery in Argentina and Chile — But the Profits Go Abroad
Prince Harry is pleading for reconciliation — but the royals are just as sick of his victimhood as everyone else
The Road to Freedom: She Protested Putin, Escaped House Arrest, and Survived a 2,800-Kilometer Journey
OpenAI's Flip-Flop: No Longer Going Commercial, Back to Nonprofit, After Musk Lawsuit and Backlash
“Trump Supporter” Aims to Bring a MAGA-Style Shift to Romania
First From China: Zhao Xintong Wins the Snooker World Championship
Nvidia Faces Billion-Dollar Losses – Warns: China Is on Its Way to Becoming an AI Superpower
Trump Rules Out Third Term, Names JD Vance and Marco Rubio as Potential Successors
Mexico Says ‘No’ to U.S. Troops: President Sheinbaum Rejects Trump’s Offer to Fight Cartels
Nigel Farage’s Reform UK Storms the Map, Wrecking the Two-Party Monopoly
DOGE: Reimagining Government Operations with AI
Common Sense Returns to Britain's Legal System: UK Supreme Court Declares a Woman Is… a Woman
Beijing Says U.S. Is ‘Reaching Out’ for Tariff Talks Amid Soaring Trade Tensions
U.K. Court Rejects Prince Harry’s Final Appeal Over Police Security
Prince Harry’s Heartfelt Outburst Rocks the Royal Family
Trump Shares AI-Generated Image of Himself as… Pope, Prompting Outrage Reaction
Transgender Swimmer Secures Five Gold Medals at U.S. Masters Championship
Prince Harry: “I Want Reconciliation with My Family”
Germany's Alternative für Deutschland (AfD) party has now been officially labeled “right-wing extremist” by the federal office for the so-called “protection of the constitution.”
Amazon Launches Satellite Internet Service Amidst Competition with SpaceX
Transformative Changes in Women's Wrestling: The Rise of WWE Superstars
The Rush to the White Gold: Global Investment Surge in Natural Hydrogen Exploration
This is a day in Spain without electricity and internet
Reform UK Surprises in British Elections, Challenging Traditional Two-Party System
180-Year-Old Christian University in South Carolina Announces Closure Due to Unmet $6 Million Fundraising Goal
Brazilian Woman Jailed for Fourteen Years for Writing “You Lost, Idiot” on Statue During Protest
Trump Administration Removes National Security Adviser Mike Waltz Amid Signal Chat Controversy
Dutch Politician Eva Vlaardingerbroek Receives Spyware Threat Alert from Apple
Paramount Board Considers Settlement in Trump’s $20 Billion Lawsuit Over "60 Minutes" Interview
U.S. Economy Shrink in Trump’s First Quarter as Tariff Policy Raises Questions
Deadline Looms for RTS Meter Replacement: Hundreds of Thousands at Risk of Heating Disruption
Sweden Grapples with Deadly Gun Violence: Suspect Arrested After Three Young Men Killed in Uppsala Hair Salon
Walz Reveals Why Harris Chose Him as Her Running Mate and Reflects on Democratic Losses
Spain Restores Power After Unprecedented Nationwide Blackout
Carney Secures Liberal Mandate in Canada’s Federal Election
Death Penalty Sought as Luigi Manion Pleads Not Guilty in CEO Murder Case
President Trump contacts Jeff Bezos after reports of Amazon considering listing tariff surcharges; company clarifies no such plan for main platform
Spain and Portugal Recover from Massive Blackout
Liverpool Clinches Record-Equalling 20th English League Title Under Arne Slot
Singapore Politicians Warn Against Foreign Interference in Election
Driver Ploughs into Vancouver Festival Crowd, Killing Nine
Depression, Fear of Defamation, and a Tragic End: New Details on Virginia Giuffre’s Suicide
“Sharia for UK, Allah Akbar!”
Massive Explosion at Iran's Bandar Abbas Port Linked to Suspicious Chemical Shipments
Incident Reflection: A Harsh Reality Check
Pakistani migrants to Danish man: “ “We have 5 children while you have 1 or 2. In 10 years, there will be more Pakistanis than Danes here.“
Clashes Erupt in London as Tensions Rise Between Indian and Pakistani Communities
Specialized anti-drone weapons deployed among security personnel Ahead of Papal Funeral
How do you fix this culture?
×