The supermarket giant today announced that pre-tax profits slid to £825 million for the 12 months to February, compared with £1.03 billion the previous year.
It said profits were weighed down by £892 million in Covid-related costs and the company’s decision to hand £585 million in business rates relief back to the Government.
It had benefited from a jump in demand for groceries during the pandemic, with more meals eaten at home amid restrictions on the hospitality sector and changes to working habits.
Supermarket giant Tesco today announced that pre-tax profits slid by 20 per cent to £825 million for the 12 months to February, compared with £1.03 billion the previous year
Group sales excluding fuel increased by 7 per cent to £53.4 billion for the year, buoyed by soaring online sales.
Online sales jumped by 77 per cent to £6.3 billion in the UK as the company doubled delivery capacity to meet rising demand from housebound customers.
However, the results show the profit from the boost in sales was largely wiped out by extra costs from the pandemic, including millions for staff PPE, social distancing barriers and signage and staff costs.
In a statement regarding the results, Tesco said: ‘We incurred significant costs in safeguarding our customers and colleagues, primarily through higher payroll costs.
‘All colleagues who were off-work due to COVID-19 and those who were required to shield or self-isolate received full-pay from their first day of absence.’
Tesco boss Ken Murphy, commenting on his first set of annual figures as chief executive said: ‘Tesco has shown incredible strength and agility throughout the pandemic’
It said profits were weighed down by £892 million in Covid-related costs, including millions spent on social distancing measures and the company’s decision to hand £585 million in business rates relief back to the Government
The company also awarded three sets of bonuses throughout the year ‘in recognition of our store and distribution colleagues’.
Tesco boss Ken Murphy, commenting on his first set of annual figures as chief executive said: ‘Tesco has shown incredible strength and agility throughout the pandemic.
‘By putting our customers and colleagues first, we have built a stronger business.
‘I’d like to say a huge thank you to the entire team for rising so selflessly to every challenge they’ve faced. Their efforts have been truly heroic.
‘While the pandemic is not yet over, we’re well-placed to build on the momentum in our business.
‘We have strengthened our brand, increased customer satisfaction and improved value perception.
‘We have doubled the size of our online business and through Clubcard, we’re building a digital customer platform. Sustainability is now an integral part of our business strategy and we’re doubling down on our efforts to reach net zero.’