Tesco profit set to fall as tough UK economy bites

LONDON: Tesco, Britain's biggest retailer, warned its profit would fall in the current year due to the tough economic conditions and pressure on consumers after it reported a 35.8% rise for the 2021-22 year.

The group, which has an over 27% share of Britain's grocery market, said on Wednesday it made retail adjusted operating profit of 2.65 billion pounds ($3.45 billion) in the year to Feb. 26 - in line with guidance of slightly above 2.6 billion pounds and up from 1.96 billion pounds in 2020-21.

For the 2022-23 year it forecast retail adjusted operating profit of between 2.4 billion pounds and 2.6 billion pounds.

"Given the significant uncertainties in the external environment, we believe it is appropriate to provide profit guidance in the form of a wider than usual range," Tesco said.

Inflation jumped to 7% in March, official figures showed on Wednesday.

Tesco said three factors were likely to influence its performance - the return to more normal customer behaviour after the COVID-19 pandemic, the level of cost inflation and its ability to partially offset it through more savings, and the investment required to maintain its price position relative to the market.

Tesco said total group sales rose 3.0% to 54.8 billion pounds in its 2021-22 year.

The group has to date returned 300 million pounds to shareholders through a share buyback programme and has committed to a further 750 million pounds by April 2023. - Reuters