OWN PHONE: Tesco, Britain's biggest retailer, will launch its first own-brand smartphone by the end of the year, building on the success of the Hudl tablet it launched last year, it said on Tuesday. — Reuters
LONDON: Tesco, Britain's biggest retailer, reported its first quarter of underlying UK sales growth for over three years on Wednesday, but warned it was still battling in a price war which would pressure operating profits in the current year.
The firm said UK sales at stores open over a year rose 0.9% in the 13 weeks to Feb 27, its fiscal fourth quarter, building on growth over its six-week Christmas trading period.
Tesco also reported a full year operating profit before one-off items of 944 million pounds (US$1.3 billion), just ahead of analysts' expectations of 932 million pounds and the 940 million pounds it made in 2014-15.
It said it continued to cut prices to stay competitive in a "challenging, deflationary and uncertain market" which would slow the pace of profit improvement, particularly in the first half of its current year.
Chief executive Dave Lewis, who joined the supermarket in 2014, said he had made significant progress in rebuilding trust in Tesco after an accounting scandal severely dented its reputation in 2014.
"We have regained competitiveness in the UK with significantly better service, a simpler range, record levels of availability and lower and more stable prices," he said. "More customers are buying more things more often at Tesco."
Sales, profit and asset values at Tesco have been hammered by changes to shopping habits and the rise of German discounters Aldi and Lidl in recent years.
Lewis is trying to revive Tesco with a focus on lower prices, streamlined product ranges, better customer service and new simplified relationships with suppliers, the root cause of the accounting issues that are the subject of a criminal investigation by Britain's Serious Fraud Office.
He has also sold assets including Tesco's South Korean business, and cut costs, including thousands of jobs, to reduce the firm's debt burden, and the supermarket's share price has risen 31% so far this year on recovery hopes. - Reuters
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