Britain's biggest retailer Tesco forecast flat profit in its new financial year after recording a 6.3% fall for 2022/23, hurt by its move to shield consumers from the full force of soaring inflation.
The group, which has a 27% share of Britain's grocery market, said on Thursday it made retail adjusted operating profit of £2.49 billion in the year to 25 February - in line with guidance of £2.4-2.5 billion but down from the £2.65 billion made in 2021/22.
"We expect to be able to deliver a broadly flat level of retail adjusted operating profit in 2023/24," Tesco said.
Forecast
It forecast retail free cash flow within its target range of £1.4-1.8 billion and adjusted operating profit of £130-160 million for its bank division.
"We are...confident that we have the right strategy to keep winning," it said.
"We will continue to prioritise investment in our customer offer whilst doing everything we can to offset the impact of ongoing elevated cost inflation."
Cutting The Cost Of Milk
Yesterday Tesco announced that it has cut the price of milk for the first time since May 2020, a possible early sign that a surge in food inflation may abate in the coming months.
In March, grocery inflation rose to a record 17.5%, according to market researcher Kantar, with prices rising fastest for products such as milk, cheese and eggs.
Overall UK inflation for food and non-alcoholic drinks was 18% in February, the highest since 1977, according to official data.
Read More: Britain's Tesco Cuts Price Of Milk For First Time Since 2020
News by Reuters, edited by Donna Ahern, Checkout. For more retail news, click here. Click subscribe to sign up for the Checkout print edition.
