Britain's biggest retailer Tesco has warned its full-year earnings will be towards the lower end of expectations as the impact of the cost-of-living crisis starts to bite into profits.
The supermarket chain said it now expected a retail adjusted operating profit of between £2.4 billion and £2.5bn for the 2022-2023 financial year, having previously forecast a profit of between £2.4bn to £2.6bn.
That is down from the £2.65bn it made in the 2021-2022 financial year.
The group posted a 10 per cent fall in underlying retail operating profit, which stood at £1.25bn for the six months to August 27.
And it cautioned that “significant” inflation pressures were being compounded by customer moves to rein in spending.
“Significant uncertainties in the external environment still exist, most notably how consumer behaviour continues to evolve,” Tesco said.
The supermarket chain is battling to retain customers as shoppers opt for cheaper rivals Aldi and Lidl, with the highest inflation in four decades and rising energy bills piling pressure on consumers to save money.
Tesco reported a 1.5 per cent decline in comparable UK sales in the first quarter in June.
However, the group reported a 0.7 per cent rise in like-for-like UK sales in the first half on Wednesday, beating analysts’ estimates for a decline.
Tesco, which also owns wholesaler Booker, controls the UK grocery market, with a 27 per cent share, and employs more than 360,000 people.
It unveiled its second staff pay rise this year to help to support workers amid the cost crisis and said it was freezing the prices of more than a thousand everyday products until 2023 to help cash-strapped customers.
Chief executive Ken Murphy said: “We know our customers are facing a tough time and watching every penny to make ends meet.
“That's why we are working relentlessly to keep the cost of the weekly shop as affordable as possible, with our powerful combination of Aldi Price Match, Low Everyday Prices and Clubcard Prices, together covering more than 8,000 products, week in, week out.
“We are also investing significantly in our colleagues, with a further boost to pay announced today for our UK stores.”
“Customers are seeking out the quality and value of our own-brand ranges as they work to make their money go further, whether they are switching from branded products, between categories or cutting back on eating out.
“As we look to the second half, cost inflation remains significant, and it is too early to predict how customers will adapt to ongoing changes in the market.”
Rival Morrisons reported a 50 per cent slump in adjusted earnings in the third quarter last week.
Even Aldi, which is winning customers and growing its market share, has reported a slide in pretax profit of more than 85 per cent from the year before.
Analysts have said losing customers to Aldi and other discount supermarkets would be Tesco’s “main challenge” going forward.
MATCH INFO
Alaves 1 (Perez 65' pen)
Real Madrid 2 (Ramos 52', Carvajal 69')
Islamophobia definition
A widely accepted definition was made by the All Party Parliamentary Group on British Muslims in 2019: “Islamophobia is rooted in racism and is a type of racism that targets expressions of Muslimness or perceived Muslimness.” It further defines it as “inciting hatred or violence against Muslims”.
UAE currency: the story behind the money in your pockets
How tumultuous protests grew
- A fuel tax protest by French drivers appealed to wider anti-government sentiment
- Unlike previous French demonstrations there was no trade union or organised movement involved
- Demonstrators responded to online petitions and flooded squares to block traffic
- At its height there were almost 300,000 on the streets in support
- Named after the high visibility jackets that drivers must keep in cars
- Clashes soon turned violent as thousands fought with police at cordons
- An estimated two dozen people lost eyes and many others were admitted to hospital
Earth under attack: Cosmic impacts throughout history
- 4.5 billion years ago: Mars-sized object smashes into the newly-formed Earth, creating debris that coalesces to form the Moon
- 66 million years ago: 10km-wide asteroid crashes into the Gulf of Mexico, wiping out over 70 per cent of living species – including the dinosaurs.
- 50,000 years ago: 50m-wide iron meteor crashes in Arizona with the violence of 10 megatonne hydrogen bomb, creating the famous 1.2km-wide Barringer Crater
- 1490: Meteor storm over Shansi Province, north-east China when large stones “fell like rain”, reportedly leading to thousands of deaths.
- 1908: 100-metre meteor from the Taurid Complex explodes near the Tunguska river in Siberia with the force of 1,000 Hiroshima-type bombs, devastating 2,000 square kilometres of forest.
- 1998: Comet Shoemaker-Levy 9 breaks apart and crashes into Jupiter in series of impacts that would have annihilated life on Earth.
-2013: 10,000-tonne meteor burns up over the southern Urals region of Russia, releasing a pressure blast and flash that left over 1600 people injured.
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
Stormy seas
Weather warnings show that Storm Eunice is soon to make landfall. The videographer and I are scrambling to return to the other side of the Channel before it does. As we race to the port of Calais, I see miles of wire fencing topped with barbed wire all around it, a silent ‘Keep Out’ sign for those who, unlike us, aren’t lucky enough to have the right to move freely and safely across borders.
We set sail on a giant ferry whose length dwarfs the dinghies migrants use by nearly a 100 times. Despite the windy rain lashing at the portholes, we arrive safely in Dover; grateful but acutely aware of the miserable conditions the people we’ve left behind are in and of the privilege of choice.
GIANT REVIEW
Starring: Amir El-Masry, Pierce Brosnan
Director: Athale
Rating: 4/5
Key recommendations
- Fewer criminals put behind bars and more to serve sentences in the community, with short sentences scrapped and many inmates released earlier.
- Greater use of curfews and exclusion zones to deliver tougher supervision than ever on criminals.
- Explore wider powers for judges to punish offenders by blocking them from attending football matches, banning them from driving or travelling abroad through an expansion of ‘ancillary orders’.
- More Intensive Supervision Courts to tackle the root causes of crime such as alcohol and drug abuse – forcing repeat offenders to take part in tough treatment programmes or face prison.
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The Al Barzakh Festival takes place on Wednesday and Thursday at 7.30pm in the Red Theatre, NYUAD, Saadiyat Island. Tickets cost Dh105 for adults from platinumlist.net
