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.
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Groom and Two Brides
Director: Elie Semaan
Starring: Abdullah Boushehri, Laila Abdallah, Lulwa Almulla
Rating: 3/5
How to get there
Emirates (www.emirates.com) flies directly to Hanoi, Vietnam, with fares starting from around Dh2,725 return, while Etihad (www.etihad.com) fares cost about Dh2,213 return with a stop. Chuong is 25 kilometres south of Hanoi.
Seven tips from Emirates NBD
1. Never respond to e-mails, calls or messages asking for account, card or internet banking details
2. Never store a card PIN (personal identification number) in your mobile or in your wallet
3. Ensure online shopping websites are secure and verified before providing card details
4. Change passwords periodically as a precautionary measure
5. Never share authentication data such as passwords, card PINs and OTPs (one-time passwords) with third parties
6. Track bank notifications regarding transaction discrepancies
7. Report lost or stolen debit and credit cards immediately
Why the Tourist Club?
Originally, The Club (which many people chose to call the “British Club”) was the only place where one could use the beach with changing rooms and a shower, and get refreshments.
In the early 1970s, the Government of Abu Dhabi wanted to give more people a place to get together on the beach, with some facilities for children. The place chosen was where the annual boat race was held, which Sheikh Zayed always attended and which brought crowds of locals and expatriates to the stretch of beach to the left of Le Méridien and the Marina.
It started with a round two-storey building, erected in about two weeks by Orient Contracting for Sheikh Zayed to use at one these races. Soon many facilities were planned and built, and members were invited to join.
Why it was called “Nadi Al Siyahi” is beyond me. But it is likely that one wanted to convey the idea that this was open to all comers. Because there was no danger of encountering alcohol on the premises, unlike at The Club, it was a place in particular for the many Arab expatriate civil servants to join. Initially the fees were very low and membership was offered free to many people, too.
Eventually there was a skating rink, bowling and many other amusements.
Frauke Heard-Bey is a historian and has lived in Abu Dhabi since 1968.
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
