ESCO shares jumped after profits doubled and the country’s largest food vendor assured shelves would remain stocked over Christmas despite the supply and lorry driver crisis that is affecting businesses and consumers alike.
In the six months to August, sales rose 3% to £27.3 billion, while profits jumped more than 100% to £1.1 billion, partly thanks to the efforts of Harry Kane, Gareth Southgate and co, who helped the country over the summer. stuck with one. Race to the finals of the delayed Euro 2020 tournament.
Families living in the UK also helped the supermarket giant, with Morrison now being talked about as a potential takeover candidate in the wake of a private equity deal and rumors that Sainsbury’s could go the same way.
Chief executive Ken Murphy was under some pressure from the city, with investors suggesting he lacked a bigger vision for Tesco.
Today they launched a £500 million share buy back program, promising more in the future, and boosting profit forecasts. Stronger relationships with suppliers mean that shelves will remain stocked, he said. There will be no shortage of turkey Christmas, he vowed.
Shares jumped 13p, 5% to 267p, which values Tesco at £20 billion. That’s almost three times what Clayton, Dubilier and Rice paid for Morrison, but it ends up looking like digestible food if anyone decides to initiate a bid.
Murphy said: “Against a background of profound transformation, Tesco has a number of unique advantages. The scale and reach of our store estate and online operations in the UK is unmatched. Our ability to reward loyalty through ClubCard is our relationship with our customers. Our world-class food retail expertise coupled with our strong supplier partnerships ensure we can provide our customers with great value and quality while removing the reason to shop elsewhere. Together, these forces mean This allows Tesco to anticipate and respond to changes in the market, meeting customer needs better than anyone else.”
Richard Lim of Retail Economics said: “These are extremely impressive results and the retailer is once again the one to watch. Their transition to a more simplified business model is delivering improved efficiencies and a renewed focus on value and loyalty to customers.
Murphy dismissed talk of a supply chain crisis. He added: “It is no secret that there are problems in the supply chain. We are maintaining very good availability. But there will be bumps in the road until Christmas and beyond.”
Murphy says today that Tesco has been revamped — it wants to serve customers, shareholders, and the planet really “a little better every day.”
He denied being involved in a dispute between the government and business over staff shortages, saying: “Our results speak for themselves.”
He noted of the government’s “leveling up” policy that retailers are “a shining beacon of progress”, where “anyone from any background can make it to the top”.
Murphy said he would need a crystal ball to know for sure what would happen with the supplies over the next few months, but added: “We are coping. I don’t expect the challenges to go away, I would have hoped.” I hope we can overcome them.”
He also downplayed inflation concerns, saying that recently his own customers had enjoyed deflation, falling costs due to intense price competition in the supermarket sector.
Sophie Lund-Yates in Hargreaves Lansdowne Said: “Tesco’s enormous scale means it is handling supply chain crises better than others – this is a time when being the biggest fish in the pond really matters. The maturation of its supply relationships , deep roots have been a key tool in allowing Tesco to keep its shelves well-stocked and in the process to beat competitors. allows us to re-deliver the goods on a large scale.”