Tesco has posted a flat performance for the full year 2015/16, according to its preliminary results issued this morning (13 April).
The grocer posted group a like-for-like group sales increase of 0.0 per cent, however its core UK & ROI market saw a decline of 0.7 per cent.
Its International business saw like-for-like sales rise 2.3 per cent, with Europe (excluding Ireland) up 3.5 per cent and Asia up 0.6 per cent.
At group level, Tesco recorded sales of £48.3 billion, a 0.1 per cent increase at constant exchange rates. Its core UK & ROI division posted an operating profit of £505 million, which is up 1.4 per cent at constant exchange rates.
“We have made significant progress against the priorities we set out in October 2014,” chief executive Dave Lewis said in a statement.
"We have regained competitiveness in the UK with significantly better service, a simpler range, record levels of availability and lower and more stable prices. Our balance sheet is stronger and we are making good progress in rebuilding trust in Tesco and our investment case.
"Our process of transformation has generated broad-based positive momentum in the UK and internationally. We set out to start rebuilding profitability whilst reinvesting in the customer offer, and we have done this. More customers are buying more things more often at Tesco."
Commenting on its performance, Barclays European Food Retail Equity Research said, "Having delivered at the top end of profit expectations for 2015/16, Tesco is adopting a cautious tone on 2016/17. While the company references ‘the pace of improvement in profitability (in 16/17)’, it notes that the ‘challenging, deflationary and uncertain market’ (and indeed its own price investment) needs to be remembered when forecasting 1H – in other words, the 2H UK margin of 1.6 per cent is not necessarily the base for 1H16/17."
© 2016 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. To subscribe to ESM: The European Supermarket Magazine, click here.
