Tesco has cautioned the Labour party against imposing tax hikes on businesses despite generating profits exceeding £100 per second. The supermarket chain faced accusations of excessive corporate greed as it raised its full-year profit outlook following a £1.67 billion earnings over the past six months.
The surge in profits occurred despite the controversial increase in employers’ national insurance contributions in April. Shareholders were pleased with a hefty £314 million half-year dividend payout. Tesco’s CEO, Ken Murphy, urged Chancellor Rachel Reeves to present a growth-oriented and job-friendly Budget next month, emphasizing the importance of not impeding industry’s ability to provide value to customers.
In response to Tesco’s profitability, Sharon Graham, the general secretary of Unite, criticized the company for accumulating substantial cash reserves and distributing substantial dividends to shareholders while many workers struggle financially. She demanded that the Labour government takes action to address profiteering and ensure workers are not burdened by corporate greed.
When questioned about Tesco’s pricing strategy, Mr. Murphy emphasized the company’s commitment to all stakeholders. He highlighted that Tesco’s price inflation remains below the industry average, benefiting its Clubcard customers with significant savings.
Driven by increased customer acquisition, cost efficiencies, and favorable weather conditions, Tesco exceeded expectations with its half-year financial results. As a result, the company revised its annual profit target to a range of £2.9 billion to £3.1 billion. Despite earlier projections of declining profits due to competitive pressures, Tesco’s UK sales rose by 4.9% in the first half of the year, reaching over £33 billion in total sales.
While acknowledging customer concerns about the economic landscape, Mr. Murphy expressed optimism about a successful Christmas season and reiterated the company’s confidence in its offerings. He anticipated heightened competition from rivals in the latter half of the financial year.
Tesco highlighted its successful product launches, including over 470 new items, with a focus on its premium Finest range. The company also emphasized its online sales growth of over 11% and its use of artificial intelligence to optimize delivery routes, reducing thousands of miles traveled per week.
Overall, Tesco’s performance underscored its market strength and strategic initiatives aimed at sustaining growth and enhancing customer satisfaction.