Tesco has cautioned the Labour party against imposing tax increases on businesses, despite recording profits exceeding £100 per second. The supermarket chain faced accusations of excessive corporate profit as it raised its full-year profit outlook following a £1.67 billion profit in the last six months. This came despite the criticism received for the increase in employers’ national insurance contributions in April, with shareholders receiving a £314 million interim dividend.
The CEO of Tesco, Ken Murphy, urged Chancellor Rachel Reeves to present a growth-oriented and job-friendly Budget in the upcoming month. Murphy emphasized the importance of not hindering industry’s ability to provide value to customers, expressing that the current situation was already challenging enough. However, Sharon Graham, the general secretary of Unite, criticized Tesco for amassing significant profits and paying out substantial dividends while many workers struggle financially.
When asked about Tesco’s pricing strategy, Mr. Murphy emphasized the company’s commitment to all stakeholders. He highlighted that Tesco’s price increases were below industry averages and that Clubcard customers were benefiting from significant savings. The company’s better-than-expected performance in the first half of the year, driven by attracting customers from competitors, cost efficiencies, and favorable weather conditions, led to an upward revision of the annual profit forecast to £2.9 billion to £3.1 billion.
Tesco’s market share has grown to 28.4% this year, with UK half-year sales increasing by 4.9%. Despite concerns expressed by customers regarding the Budget and economic conditions, Mr. Murphy remained optimistic about a successful Christmas season. He acknowledged the potential for heightened competition from rivals in the latter half of the financial year.
Noteworthy achievements highlighted by Tesco included the launch of over 470 new products in the preceding six months, with a focus on expanding its premium Finest range. The company also saw a significant increase in online sales, leveraging artificial intelligence to optimize delivery routes and reduce mileage by about 100,000 miles per week.