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UK’s Largest Supermarket Chain Tesco Report Drop In First-Half Profit


10/07/2020


UK’s Largest Supermarket Chain Tesco Report Drop In First-Half Profit
The largest retailer of the United Kingdom Tesco reported a 15.6 per cent drop in its core profit despite a significant growth in sale because of the Cvoid-19 pandemic and as sale costs outweighed the increased sale coupled with losses incurred by Tesco Bank.
 
The new chief executive Ken Murphy has been leading the supermarket group since the start of the month.
 
In the 26 weeks to August 29, an operating profit before one-off items of £1.037 billion was made by it, Tesco said. That number was lower than the profit of £1.229 billion that was reported by the company in the same period a year ago.
 
The group however forecast that it would be able to maintain its retail operating profit in the full 2020-21 year at least at the same level as of 2019-20 on a continuing operations basis.
 
In the first half of the year, the company reported a 7.6 per cent growth in UK like-for-like sales after recording a 8.7 per cent growth in the first quarter. At the same time the company laos incurred costs of £533m towards its response to the pandemic.
 
There was a 15.5 per cent growth in like for like sales in its Irish operations during the first half of the year, Tesco noted, and added that this growth was driven by its "out of home" consumption and high customer confidence in the safety measures employed by the company.
 
The company noted particularly strong growth in its large stores and in its online grocery business, Tesco said.
 
But a loss of £155m for the same period was reported by Tesco Bank while also forecasting an expected loss of £175-200m for the full year.
 
A former boss at healthcare group Walgreens Boots Alliance, Ken Murphy succeeded Dave Lewis, who headed Tesco for six years during which he staged a revival for the company by focusing on its home market after the accounting scandal had hit the company. 
 
However there are still major challenges for Tesco which include the long-term impact of the pandemic, a recession in the UK and the global economy and possible disruption at the end of the Brexit transition period which comes to a close at the end of 2020.
 
The strategy and direction being followed by the retailer currently was apt, said Tesco's new CEO Ken Murphy.
 
"I think you can take it that I'm really happy with the strategy and direction of the company, unless you actually see it changing in the stores," he told reporters.  "As far as I'm concerned, my job is to maintain momentum in the business and keep us focused on delivering a brilliant Christmas," he added.
 
There were also no plans of the company to move out of its current overseas markets, Ken Murphy also said.
 
"At this stage there is no plan for further retrenchment," he told reporters.  "Right now I'm just really focused on getting to know these businesses, getting to meet the team in central and eastern Europe when I'm allowed to travel and really understanding the drivers of that business," he said.
 
(Source:www.rte.ie)