| Tesco PLC (GB00BLGZ9862) | |||
4,05 GBXStand (close): 03.07.25 |
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| Datum / Uhrzeit | Titel | Bewertung |
| 27.06.25 12:43:44 | Sainsbury’s investors eye sales as grocers step up focus on price cuts |  |
| Sainsbury’s will be the latest supermarket to shed light on how its sales have fared in recent months as grocers battle to lure in squeezed shoppers amid rising food inflation. The UK’s second largest supermarket chain will publish its first quarter trading update on Tuesday. It has not been immune to competition heating up among UK retailers in recent months, several of whom have come under pressure to cut prices to reel in consumers struggling with a higher cost of living. The shift has partly been sparked by Asda promising its biggest price cuts in 25 years while discounters Aldi and Lidl continue to take on larger rivals with low-cost products. Both Tesco and Sainsbury’s have Aldi Price Match lines, offering hundreds of products price-matched to Aldi across stores.Sainsbury’s said in April it had launched the biggest Aldi Price Match scheme in the market (Alamy/PA) Sainsbury’s recently said it had more products in the scheme than any other retailer with around 800 items from fresh and cupboard food to wine and toiletries. A group of analysts for AJ Bell pointed out that Sainsbury’s shares were “nudging toward their highest mark in a year, and they are not that far from their five-year Covid-inspired high either”. “This suggests that fears of a supermarket price war, spearheaded perhaps by Asda, are yet to be realised,” they said. The analysts noted that recent data from the Office for National Statistics showed food and non-alcoholic drink prices rose by 4.4% in the year to May – the highest level in more than a year. Investors will be keen to see how the group’s sales have fared in recent months, since reporting a 4.2% increase in full-year sales, excluding fuel, back in April. At the time, it predicted its profits to be flat in the year ahead as stronger sales volumes were expected to be offset by weaker profitability amid the investment in price cuts. This means that underlying profits should come in at about £1 billion for the year to the end of March 2026. Investors will also be watching out for any update to its annual forecast on Tuesday. View Comments |
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| 26.06.25 10:32:49 | Driving reuse will cut waste and ease packaging tax costs, UK study claims | |
| Moving 30% of grocery goods sold in the UK to reusable packaging could cut emissions and EPR costs by more than 90%, new research has claimed. The report by consultancy GoUnpackaged and involving a panel featuring Tesco, Ocado and WRAP said the industry and government should “commit to a target” for reusable packaging in the UK. The study outlines a roadmap for building reusable packaging systems across the UK grocery retail sector to hit the 30% target by 2035. According to the research, the target could be achieved by switching 18 “priority” categories of products to “around 30 standardised packaging types”. The study ranked the product areas in order of the highest cost savings: home-cooking products – including sauces, pasta and rice – was top, with the list also featuring alcohol, coffee, detergents, fruit and ready meals. The report estimates hitting the 30% re-use target could cut packaging-related emissions by 95% and lead to an annual saving of £136m on the products under the scope of the UK’s extended producer responsibility, or EPR, rules. The saving amounts to a 94% reduction in EPR feeds per item switched to reuse, the study showed. Campaigners argue that reuse systems could generate cost savings for retailers over time, compared with continually sourcing new single-use materials. At present, only 1-2% of consumer packaging in the UK is reusable. The report suggests increasing this proportion to 10% by 2030 and then 30% by 2035. To reach these targets, the researchers propose a combination of adapting regulation, infrastructure investment and incentives. These include standardising reusable packaging formats, introducing mandatory reporting requirements, and providing start-up funding for reuse pilots. The organisations backing the report, which include packaging giant Amcor, logistics business CHEP and WWF, stress voluntary initiatives alone will not deliver the change needed. “The modelling results show, for the first time, an evidenced view of reuse working at scale in the UK for grocery retail, enabling industry and government to make insightful decisions about how to move forwards to co-create the necessary transition to reuse in the UK,” a statement from the report’s advisory panel read. However, the researchers admitted their modelling suggests the re-use push would need investment of £149m a year up to 2035. It suggested three ways to fund the investment: add to EPR fees; a mix of higher EPR fees and a tax on single-use items; a combination of increased EPR charges and government funding. “Industry needs long-term policy certainty from the government to create a level playing field, allow long-term planning and investment, and create the right incentives to support the transition to reuse,” the report read. Story Continues Last month, PepsiCo announced changes to its targets on packaging. The US food and drinks giant had been looking to “deliver 20% of all beverage servings through reusable models by 2030”, a target that no longer exists. The company said it will focus on a wider goal for reusable, recyclable, or compostable (RRC) packaging by design. By 2030, PepsiCo is aiming for at least 97% of its packaging to be “RRC packaging by design … in our primary and secondary packaging in our key packaging markets”. PepsiCo is aiming to cut its use of virgin plastic by 2% year-on-year on average through to 2030. The company’s previous target was for a 20% decrease “derived from non-renewable sources” by the same year. The group’s goal for its use of recycled content stands at a reduction of at least 40% “by 2035 or sooner”. It had been targeting using 50% of recycled content by 2030. In December, The Coca-Cola Company set out revised packaging targets. The group now has two goals on packaging, set for 2035. One is an aim to use 35% to 40% (down from 50%) recycled material in “primary packaging”, which it says is plastic, glass and aluminium. Coca-Cola said it wants to increase its use of recycled plastic from 30% to 35%. The other is to “ensure the collection of 70% to 75% of the equivalent number of bottles and cans introduced into the market annually”. The new targets do not include an explicit goal for refillable or reusable packaging but Coca-Cola said it will “continue to invest in refillable packaging where infrastructure already exists”. A spokesperson said: “We intend to continue to expand the use of refillable packaging in markets where the infrastructure is in place to support this important part of our portfolio and we tailor our refillable packaging approach by market, based on local conditions.” "Driving reuse will cut waste and ease packaging tax costs, UK study claims" was originally created and published by Just Drinks, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. View Comments |
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| 26.06.25 09:53:53 | Miliband rejects plans for £25bn energy cables to Sahara solar farms | |
| Solar mirrors in Morocco. The rejected scheme would have imported renewable power from North Africa via 2,500-mile-long subsea cables - FADEL SENNA/AFP Ed Miliband has turned down a scheme to import solar and wind power from Morocco via 2,500-mile-long subsea cables. The Xlinks scheme, overseen by Sir Dave Lewis, the former Tesco chief, would see high-voltage direct current power imported from North Africa through cables running along the coasts of Spain, Portugal and France, and coming ashore in Torridge, Devon. The scheme was expected to provide electricity for 9m homes and cut carbon emissions from the UK power sector by around 10pc – while also bringing down energy bills through a reduction in wholesale costs. However, the Energy Secretary is understood to have refused to back the £25bn project, which was seeking subsidies from the Government. Xlinks had asked for a contract for difference, which would effectively guarantee a minimum price for its power for up to 25 years. Mr Miliband is understood to instead want to focus on “homegrown” energy projects. The subsea cables were to be made at a factory in Scotland and the power would have exceeded the output of Hinkley C, the £42bn nuclear power station being built by EDF in Somerset. It is understood that Xlinks is also seeking separate finance via power purchase agreements, where companies contract to buy clean power directly from generators. This means it could still go ahead if there is sufficient private sector interest. However, Mr Miliband’s decision is still a significant set-back. Sir Dave told The Telegraph in March that Xlinks could take its project elsewhere if ministers did not back it. The Department for Energy Security and Net Zero has refused to comment on “speculation”, but made clear that a full statement was expected on Thursday. Xlinks was not able to comment pending the Government’s statement. Xlinks would see seven solar farms and up to 1,000 wind turbines built across an area of Moroccan desert roughly the size of Greater London. The scheme was expected to deliver about 3.6 gigawatts of electricity to the UK’s national grid – equating to about 8pc of total power demand. Electricity would be delivered to the UK via four large subsea cables laid by a ship owned by Xlinks’s sister company, XLCC, which is also building a factory at Hunterston in Scotland to manufacture the 10,000 miles of cable. Such cables, known as interconnectors, already link the UK’s power grid to France, Belgium, Norway and the Netherlands, with another link to Denmark under construction.Britain's energy links The factory, adjacent to the town’s closed nuclear power stations, was granted planning permission last year and awarded a £9m Scottish Enterprise grant towards its £1.4bn cost. Story Continues Its centrepiece will be a massive 600ft tower in which the cable will be coated in layers of insulation before being coiled on to giant reels for loading into the cable-laying vessel. Xlinks has already raised £100m from financial backers thought to include the Abu Dhabi National Energy Company, along with French giant TotalEnergies and British supplier Octopus Energy. Interconnectors are becoming increasingly important in keeping the nation’s lights on as the country shifts towards a reliance on intermittent renewable energy. The UK gets up to 20pc of its electricity from France and other neighbours at some times of the year. View Comments |
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| 18.04.25 17:30:28 | Tesco (LSE:TSCO) Completes Share Buyback Program |  |
| Tesco recently reported strong annual financial results, with revenue and net income both showing impressive growth. Despite a decrease in earnings per share from continuing operations, the overall earnings per share increased, and the company completed a significant share buyback program. These positive developments may have helped drive Tesco's share price up by 13% over the past week. In contrast, the broader market remained flat over the same period. The earnings call and completion of the buyback likely reinforced investor confidence, contributing positively to Tesco's recent price movement. We've discovered 1 risk for Tesco that you should be aware of before investing here.LSE:TSCO Revenue & Expenses Breakdown as at Apr 2025 AI is about to change healthcare. These 26 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10b in market cap - there's still time to get in early. Tesco's recent achievements, including strong financial results and a significant share buyback, have potential implications for the company's future performance. These developments may further enhance Tesco's digital investment strategies and personalized pricing approaches. The focus on quality and innovation is aimed at boosting customer loyalty and market share, which could positively affect future revenue and earnings forecasts. Analysts currently predict revenue growth of 2.6% annually over the next three years and expect earnings to reach £1.9 billion by April 2028. These projections align with the enhanced investor confidence reflected in the 13% share price increase over the past week. Over the last five years, Tesco delivered an impressive total return of 86.23%, including share price gains and dividends. Comparing to its one-year performance, Tesco has outperformed both the UK market, which returned 2.3%, and its UK Consumer Retailing peers, reflecting its resilience in a competitive sector. Despite the recent positive news, Tesco's current share price of £3.46 remains below the analysts' consensus price target of £3.80, suggesting there is potential for further upside. Review our historical performance report to gain insights into Tesco's track record. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Story Continues Companies discussed in this article include LSE:TSCO. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com View Comments |
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| 17.04.25 05:05:01 | Investors Can Find Comfort In Tesco's (LON:TSCO) Earnings Quality | |
| Shareholders appeared unconcerned with Tesco PLC's (LON:TSCO) lackluster earnings report last week. We did some digging, and we believe the earnings are stronger than they seem. Our free stock report includes 1 warning sign investors should be aware of before investing in Tesco. Read for free now.LSE:TSCO Earnings and Revenue History April 17th 2025 The Impact Of Unusual Items On Profit Importantly, our data indicates that Tesco's profit was reduced by UK£329m, due to unusual items, over the last year. It's never great to see unusual items costing the company profits, but on the upside, things might improve sooner rather than later. We looked at thousands of listed companies and found that unusual items are very often one-off in nature. And, after all, that's exactly what the accounting terminology implies. If Tesco doesn't see those unusual expenses repeat, then all else being equal we'd expect its profit to increase over the coming year. That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates. Our Take On Tesco's Profit Performance Because unusual items detracted from Tesco's earnings over the last year, you could argue that we can expect an improved result in the current quarter. Because of this, we think Tesco's earnings potential is at least as good as it seems, and maybe even better! And the EPS is up 19% annually, over the last three years. Of course, we've only just scratched the surface when it comes to analysing its earnings; one could also consider margins, forecast growth, and return on investment, among other factors. With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. Case in point: We've spotted 1 warning sign for Tesco you should be aware of. This note has only looked at a single factor that sheds light on the nature of Tesco's profit. But there are plenty of other ways to inform your opinion of a company. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks with high insider ownership. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. View Comments |
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| 14.04.25 12:21:07 | Tesco Full Year 2025 Earnings: EPS Misses Expectations | |
| Tesco (LON:TSCO) Full Year 2025 Results Key Financial Results Revenue: UK£69.9b (up 2.5% from FY 2024). Net income: UK£1.60b (down 9.1% from FY 2024). Profit margin: 2.3% (down from 2.6% in FY 2024). The decrease in margin was driven by higher expenses. EPS: UK£0.23 (down from UK£0.25 in FY 2024). We've discovered 1 warning sign about Tesco. View them for free. TSCO Sales Performance Like-for-like sales growth: 3.1% vs FY 2024.LSE:TSCO Revenue and Expenses Breakdown April 14th 2025 All figures shown in the chart above are for the trailing 12 month (TTM) period Tesco EPS Misses Expectations Revenue was in line with analyst estimates. Earnings per share (EPS) missed analyst estimates by 12%. The primary driver behind last 12 months revenue was the United Kingdom and Republic of Ireland segment contributing a total revenue of UK£65.6b (94% of total revenue). Notably, cost of sales worth UK£63.9b amounted to 91% of total revenue thereby underscoring the impact on earnings. The largest operating expense was General & Administrative costs, amounting to UK£2.36b (63% of total expenses). Explore how TSCO's revenue and expenses shape its earnings. Looking ahead, revenue is forecast to grow 2.4% p.a. on average during the next 3 years, compared to a 3.6% growth forecast for the Consumer Retailing industry in the United Kingdom. Performance of the British Consumer Retailing industry. The company's share price is broadly unchanged from a week ago. Risk Analysis What about risks? Every company has them, and we've spotted 1 warning sign for Tesco you should know about. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. View Comments |
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| 13.04.25 07:09:24 | Tesco (LON:TSCO) Is Increasing Its Dividend To £0.0945 | |
| Tesco PLC (LON:TSCO) will increase its dividend from last year's comparable payment on the 27th of June to £0.0945. This takes the annual payment to 4.2% of the current stock price, which is about average for the industry. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. Tesco's Projected Earnings Seem Likely To Cover Future Distributions We like a dividend to be consistent over the long term, so checking whether it is sustainable is important. Prior to this announcement, Tesco's dividend was comfortably covered by both cash flow and earnings. This indicates that quite a large proportion of earnings is being invested back into the business. The next year is set to see EPS grow by 31.0%. Assuming the dividend continues along recent trends, we think the payout ratio could be 48% by next year, which is in a pretty sustainable range.LSE:TSCO Historic Dividend April 13th 2025 Check out our latest analysis for Tesco Dividend Volatility The company has a long dividend track record, but it doesn't look great with cuts in the past. The annual payment during the last 10 years was £0.187 in 2015, and the most recent fiscal year payment was £0.137. Doing the maths, this is a decline of about 3.1% per year. Generally, we don't like to see a dividend that has been declining over time as this can degrade shareholders' returns and indicate that the company may be running into problems. The Dividend Looks Likely To Grow Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. Tesco has seen EPS rising for the last five years, at 20% per annum. The company doesn't have any problems growing, despite returning a lot of capital to shareholders, which is a very nice combination for a dividend stock to have. We Really Like Tesco's Dividend In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All of these factors considered, we think this has solid potential as a dividend stock. Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Taking the debate a bit further, we've identified 1 warning sign for Tesco that investors need to be conscious of moving forward. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. View Comments |
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| 11.04.25 07:00:46 | Tesco PLC (TSCDF) (FY 2025) Earnings Call Highlights: Strong Financial Performance and Market ... | |
| Group Sales: GBP63.6 billion, a 4% increase at constant exchange rates. Adjusted Operating Profit: GBP3.1 billion, up 10.9% at constant currency. Free Cash Flow: GBP1.75 billion, at the upper end of guidance range. Net Debt: GBP9.45 billion, an improvement of GBP230 million from last year. Market Share in UK: Approximately 28%, highest in almost a decade. UK and Ireland Sales Growth: 4.2%, driven by strong volumes. Central Europe Sales Growth: 2.5%, driven by improved mix and higher volumes. UK Online Sales Growth: 10.2%, with increased orders and basket sizes. Headline Earnings Per Share: 27.38p, up 17%. Final Dividend: 13.70p per ordinary share. Store Openings: 90 new stores and over 400 refreshed. Shareholder Returns: GBP1.9 billion through dividends and buybacks. Return on Capital Employed: 14.6%, significantly ahead of weighted average cost of capital. Warning! GuruFocus has detected 4 Warning Signs with TSCDF. Release Date: April 10, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Tesco PLC (TSCDF) reported a strong financial performance with sales up 4% year on year and adjusted operating profit up 11%. The company achieved its highest UK customer net promoter score in at least five years, indicating improved customer satisfaction. Tesco PLC (TSCDF) has recorded consistent market share gains, reaching around 28% in the UK, the highest in almost a decade. The company has returned GBP1.9 billion to shareholders through dividends and buybacks, demonstrating strong shareholder returns. Tesco PLC (TSCDF) has made significant investments in value, quality, and service, which have strengthened its customer offer and brand perception. Negative Points Consumer sentiment remains fragile due to economic uncertainty, which could impact future sales. The competitive environment in the UK food retail sector is intense, requiring continuous investment to maintain market position. Despite strong financial performance, Tesco PLC (TSCDF) anticipates a lower level of profit year on year due to increased investment. The company faces inflationary headwinds, including tax and regulation, which could pressure margins. Tesco PLC (TSCDF) has provided a wider than usual range of profit guidance, indicating uncertainty in market conditions. Q & A Highlights Q: Can you provide insights into Tesco's pricing strategy for the year and how it plans to handle promotional activities? A: Ken Murphy, CEO, explained that Tesco is focused on maintaining a balance between everyday low pricing and promotional offers through Clubcard prices. The company aims to provide reliable pricing on essential items while offering exciting promotions on brands. Tesco's sophisticated pricing systems help focus on prices that matter most to customers. Promotional activity is at a four-year high, but Tesco is confident in its ability to attract supplier funding due to its strong market position and execution standards. Story Continues Q: Is there an irrational price war in the UK market currently? A: Ken Murphy stated that while there is an intensification in competitive positioning, it is not an irrational price war. Tesco maintains a balanced approach, focusing on customer satisfaction, colleague investment, supplier relationships, and investor returns. The company is prepared to respond flexibly to market conditions to maintain its competitive edge. Q: How does Tesco plan to address the competitive threat from Asda, and what is the company's strategy for maintaining market share? A: Ken Murphy emphasized the importance of flexibility and firepower to respond to market conditions. Tesco has built momentum with customers and aims to maintain it by focusing on value, quality, and the shopping experience. The company is determined to protect its market share and continue winning with customers. Q: What is Tesco's outlook on industry price pressures and their potential peak? A: Ken Murphy noted that predicting the peak of industry price pressures is challenging due to various factors like new tax legislation, national living wage increases, and competitive dynamics. While summer might be an estimate for price pressures to peak, Tesco remains focused on maintaining competitiveness and value for customers. Q: How does Tesco view its online business and the role of Marketplace in its growth strategy? A: Imran Nawaz, CFO, expressed confidence in Tesco's online business, highlighting its growth and market share gains. The online model benefits from operating leverage due to store fulfillment. Marketplace is still in a learning phase, with around 4,000 SKUs, and is expected to play a more significant role in the future. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. View Comments |
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| 10.04.25 13:53:26 | Supermarket price war heats up in relief for squeezed consumers | |
| The escalating price war among UK supermarkets will come as some relief for consumers, who are seeing food inflation creep up again and household bills spiral. Tesco has signalled that a price war is mounting within the sector, with the UK’s largest grocery chain saying it expects to make as much as £400 million less in profit next year as a result of what it calls “a very competitive market”. Chief executive Ken Murphy said the company is facing mounting pressure to slash prices, after competitor Asda recently promised the company’s biggest price cuts in 25 years. But the ruthless competition between grocers has undoubtedly been driven by the discounters Aldi and Lidl, with ‘Aldi price match’ signs becoming a familiar site to consumers. March’s monthly analysis of prices across the UK’s eight biggest supermarkets by Which? shows Aldi was once again the cheapest, while Asda held on to the top spot for a bigger list of groceries. At Aldi, a shopping list of 79 grocery items cost £133.73 on average across the month, with Lidl costing only 67p more for those using the Lidl Plus loyalty scheme and 70p more without. For a comparison of a bigger trolley of 203 items – which does not include Aldi and Lidl as they have a smaller range of branded products – Asda came out cheapest at £498, beating Tesco with a Clubcard by £5.03. Reena Sewraz, Which? retail editor, said: “A supermarket price war could be good news for shoppers who’ve faced years of pressure on their household budgets. “While food prices have mostly stabilised according to our latest inflation tracker, some commodities such as coffee and chocolate are causing prices to rise due to global supply issues. “However, Aldi continues to be the cheapest supermarket in our monthly price analysis with Lidl close behind and Asda the most affordable for a bigger list of groceries including a wider selection of branded items.” Commenting on Tesco’s half year results, Julie Palmer, partner at Begbies Traynor, said: “The market will be keeping a close eye on whether Tesco can maintain its pole position in the UK. “To do so, it must both reassure investors that its strategy is sound and convince customers that it remains the retailer of choice in difficult times, all while battling fierce competition from the discounters, higher wage bills and the possibility of increasing UK inflation.” Dan Lane, lead analyst at Robinhood UK, said: “Away from the US tariff backdrop, Tesco has a price war of its own to fight. The ‘Aldi price match’ promo has been a hit and Ken Murphy will surely be readying a round of ‘Asda price match’ now too. Story Continues “Lidl and Aldi have chipped away at Morrisons and Asda in particular – with Asda ready to flirt with some pyrrhic pain in the short term, it’s unlikely to overtake Tesco’s 28% market share but denting it could well be on the cards. “Tesco’s drop in operating profit and lower outlook today won’t help just before another race to lower prices though. Pricing pressures are clearly surfacing and might just get worse over the summer before they get better. Supermarket prices are now 3.5% higher than a year ago, up from 3.3% in February after falling from 3.7% in December, according to analysts Kantar. The British Retail Consortium has said it expects food inflation to hit 4% by the second half of the year amid geopolitical tensions and a £7 billion increase in costs from the autumn Budget. However, UK consumers can be assured that the competitive landscape and its price wars are significantly dampening down cost-of-living pressures here. In New Zealand, the Government is considering a possible break-up of a supermarket ‘duopoly’, with Prime Minister Christopher Luxon acknowledging that Kiwis “pay some of the highest prices on the planet for food”. Mr Luxon has promised to tackle regulatory barriers to bring in potential supermarket challengers to compete with the duopoly. View Comments |
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| 10.04.25 09:05:19 | Supermarket price war heats up as Tesco cites ‘very competitive market’ | |
| Tesco (TSCO.L) has signalled that a price war among UK supermarkets is mounting, as its boss pointed to an “intensification” of competition across the sector and targeted as much as £500 million in fresh cost cuts. Chief executive Ken Murphy said the company is facing mounting pressure to slash prices, after competitor Asda recently promised the company’s biggest price cuts in 25 years. Tesco said it expects to make as much as £400 million less in profit next year as a result of what Mr Murphy called “a very competitive market”.Tesco boss Ken Murphy said the company is facing mounting pressure to cut prices (Jonathan Brady/PA) The company said in a statement: “In the last few months, we have seen a further increase in the competitive intensity of the UK market. “We are committed to ensuring that customers get the best value in the market by shopping at Tesco and we see further opportunities to protect and strengthen our competitiveness.” The grocery giant said it expects to see adjusted operating profit of between £2.7 billion and £3.0 billion, compared with £3.1 billion in the most recent financial year. The guidance “gives us flexibility and firepower” to respond to mounting competition among supermarkets, Mr Murphy said. Britain’s major grocery chains have been engaged in the early stages of a price war that has already wiped billions off their share prices. It comes after comments by Asda chairman Allan Leighton, who in March promised sweeping price cuts in a bid to make it more competitive. Tesco also said it is looking to cut a further £500 million from its overheads to “help offset new operating cost inflation”, partly as a result of recent tax hikes for employers brought in by the Government. The company warned of price rises and inflation as a result of an increase in employer national insurance contributions (Nics) late last year. The company said that about £510 million in cost cuts last year had come from bringing in more automation in warehouses and improving supply chains, among other measures, and that it would continue with the same savings plan this year. When asked if the savings drive could mean cutting jobs, Mr Murphy said: “We never rule that out, but at the same time, we have a track record of managing it very well.” In January, it announced 400 job cuts across both stores and head office as part of plans to “simplify” the business. Nonetheless, Tesco also reported bumper sales for the most recent financial year, up 3.5% to £63.6 billion. And the supermarket said it increased its market share across the UK to 28.3%, its highest point since 2016. Mr Murphy added: “Despite inflationary headwinds, we are committed to ensuring customers get the best possible value by shopping at Tesco, and see further opportunities to strengthen our competitiveness.” Story Continues Julie Palmer, a partner at consultant Begbies Traynor, said Tesco’s cautious profit guidance is “a stark reminder” of the competition facing supermarkets. “Clearly, no retailer is immune from the turbulence of today’s economy,” she added. View Comments |
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