Tesco has raised its annual earnings expectations after strong trading in the first half of the year. The UK's biggest supermarket said good weather and efforts to keep prices low in a competitive market had boosted sales.
UK sales grew by 4.9% on a like-for-like basis compared with the same period last year. The group's adjusted operating profit also rose by 1.6% to £1.67 billion for the half-year period.
Upgraded profit forecast
Tesco now expects underlying earnings for the full year of between £2.9 billion and £3.1 billion. This represents an increase from its previous guidance range of between £2.7 billion and £3 billion.
Warmer weather and shoppers taking advantage of lower prices helped offset costs from the supermarket's investments into its product ranges. The positive performance also countered elevated business costs including higher taxes.
Price competition focus
Chief executive Ken Murphy emphasised the company's pricing strategy in the competitive retail market. "The steps we have taken to keep prices down for customers have improved our price position relative to the market," Murphy said.
He acknowledged continued challenges facing shoppers and the retail sector. "Competitive intensity remains high and with continued pressure on household budgets, we remain committed to ensuring customers get the best possible value by shopping at Tesco," Murphy added.
Sources used: "PA Media" Note: This article has been edited with the help of Artificial Intelligence.
