Tesco sees its profits rise and sales increase despite supply chain disruption

Britain's biggest supermarket Tesco raised its full-year outlook as it reported a 16.6 per cent rise in first-half core retail profit and increased sales despite labour and supply chain disruption and tough Covid-19 related comparisons a year ago.

A Tesco in Batley.

The group forecast a full-year 2021-22 adjusted retail operating profit of between £2.5bn and £2.6bn, having previously forecast a similar outcome to 2019-20.

Tesco, which has a 27 per cent share of Britain's grocery market, made adjusted retail operating profit of £1.386bn in the first half - ahead of analysts' average forecast of £1.262bn and £1.192bn made in the same period last year.

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First-half group sales rose 2.6 per cent to £27.3bn, while UK like-for-like sales rose 1.2 per cent, having risen 0.5 per cent in the first quarter.

Ken Murphy, chief executive of Tesco, said: "We've had a strong six months; sales and profit have grown ahead of expectations, and we've outperformed the market.

"This was a strong team effort and I would particularly like to recognise and thank our colleagues who continue to do an incredible job in difficult times.

"I'm really pleased with our progress as we increased customer satisfaction and grew market share leading to a strong financial performance.

"With various different challenges currently affecting the industry, the resilience of our supply chain and the depth of our supplier partnerships has once again been shown to be a key asset.

"Against a backdrop of profound change, Tesco has many unique advantages. The scale and reach of our store estate and online operations are unmatched in the UK.

"Our ability to reward loyalty through Clubcard enhances our relationship with customers. Our world-class food retail expertise combined with our strong supplier partnerships ensures we can offer our customers great value and quality, removing reasons to shop elsewhere.

"Together, these strengths mean that Tesco can anticipate and respond to changes in the market, meeting customers' needs better than anyone."

Tesco is paying an interim dividend of 3.2 pence, in line with the prior year.

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