Tesco said that since customers bought more goods than anticipated in the first half of the year, the company will achieve £2.9 billion in profit this year, £100 million more than expected.
The boss of Tesco has called on the UK government to collaborate with businesses to ensure new legislation that protects worker rights promotes productivity and growth as the supermarket revealed better-than-expected profits.
The head of the largest supermarket in the UK, Ken Murphy, expressed that he was eager to use a consultation on the employment rights bill announced by the government in the speech made by the king in July. Murphy wants to ensure that any law put forward by the UK government will protect worker rights and promote growth and productivity.
The bill will be presented to parliament in the upcoming month. It is anticipated to introduce significant changes, like a better deal for new parents, day-one protection against unfair dismissal, compulsory sick pay from the first day of illness, and an end to exploitative zero-hours contracts. These measures create a significant step in improving the working conditions in the UK.
According to a poll conducted by the TUC union, business leaders support the measures. Several large employers, such as the bakery company Greggs, have stated they are relaxed about the bill since they already offer many perks. However, many small businesses are expressing concerns about rising costs.
Tesco said that since customers bought more goods than anticipated in the first half of the year, the company will achieve £2.9 billion in profit this year, £100 million more than expected. With sales up 4% to £31.5 billion in the six months ending August 24, profits increased by 20% to £1.4 billion.
Tesco’s sales skyrocketed by the football tournament in Europe in 2024, where many people bought things to celebrate the football match. They had to hire an additional 2,000 employees during the first half of the year. Tesco also earned £260 million in cost savings, some of which came from utilizing technology to run its business more effectively.
The group also said that by lowering prices on thousands of products and adding 100 additional lines to its price-matching program against discount retailer Aldi during the previous year, bringing it to around 800, it had gained market share from competitors.
Tesco was planning for a good Christmas, the most crucial period of the operating year for retailers. It will have more goods for sale than last year as it has a relatively optimistic picture in customer sentiment.
Lower-than-expected market inflation was the reason for a slowdown in sales growth in the second quarter. They expected more customers to go for a unique and fun-filled Christmas as the customer sentiment improved before Christmas.
Consumers are willing to spend a little bit more to treat themselves by increasing their expenditure on Tesco’s Finest premium own-label range by 15%. At the same time, many customers are managing their budgets carefully by choosing to go for premium ready meals instead of dining out, reflecting a desire to treat themselves while maintaining financial alarm.
But, given the ongoing strains on homes due to rising living costs, the supermarket was painfully aware of the challenges faced by its customers.
Whoosh fast-track grocery delivery service of Tesco also grew revenues by a fifth as startup rivals, like Getir, dropped out of the market. The clothes sales have increased, and Tesco plans to relaunch its brand F&F online for the first time in six years.
In the process of cutting costs, the supermarket aims to save £240m in the second half by improving productivity using technology, such as AI, that is helping customize offerings to suit local locations. Instead of employees losing jobs, the company said technology was serving it to take on fewer employees to sustain growth.