Tesco hails sales fightback

Supermarket giant Tesco said its recovery was on track after happier shoppers helped it soar back into the black.
The group, which has been battered in recent months as a result of accounting scandals and competition from discount rivals, posted a pre-tax profit of £162million in the year to February 27. That compares to a £6billion loss this time last year – its worst ever performance.
Group sales rose 0.1% to £48.4billion with UK sales down 0.4%.
In its fourth quarter UK like-for-like sales lifted 0.9%, its first positive quarter this year, with volumes up 3.3%. It said UK customer satisfaction had increased 5% over the year as it cut prices, hired thousands of ‘customer facing roles’ and introduced 2,000 new products.
It said it had delivered £400million of savings, including closing 60 unprofitable stores, and had reduced group debt by £6.2billion including the sale of the Homeplus chain in Korea.
It said Tesco Bank had increased customer deposits with Tesco Mobile customer numbers up 5% to 4.6million.
“We have made significant progress against the priorities we set out in October 2014. We have regained competitiveness in the UK with significantly better service, a simpler range, record levels of availability and lower and more stable prices,” said chief executive Dave Lewis. “More customers are buying more things more often at Tesco. We are committed to serving shoppers a little better every day, in what remains a challenging, deflationary and uncertain market.”
Ray Gaul, vice president of research and analytics at Kantar Retail, said: “Lewis and his team have given Tesco breathing room particularly on the balance sheet with a whopping £6.2billion off debt. With investment in better pricing, a more attractive fresh produce and clothing offer and improvement in staff motivation and service Tesco is seeing footfall and shopper growth. Tesco will continue to battle deflation and aggressive pricing strategies from its rivals but is in a much better position to fight as it looks forward.”