Tesco has released its preliminary results for the year, showing a 0.9% increase in UK like-for-like sales while operating profit before exceptional items is up 30% across the group and up 60% in the UK & Republic of Ireland.
Frontier Economics advises Tesco on commercial strategy, competition and regulatory issues. Phil Maggs, a Director in Frontier’s Strategy practice said “The return to full-year positive like-for-like sales growth, for the first time since 2009/10, shows that the change in strategic focus has paid off. Cost price inflation will continue to be felt across the sector, but those with strong supplier relationships and the best understanding of customers will have more ability to mitigate.”
These are the second full set of results under CEO Dave Lewis. Tesco has previously outlined six strategic drivers to restore the businesses’ performance. These include improving brand, driving down cost, improving cash flow and utilisation of property and more efficient mixes across products and channels.
Progress to date on these drivers includes the launch of new fresh food farm brands which are now part of 64% of customers’ baskets, prices down 6% compared to September 2014 and £226 million of cost savings as part of a £1.5 billion medium-term target.
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