Tesco, Britain’s biggest retailer, says shoppers have not changed their behaviour ahead of Brexit and are not stockpiling despite an “uncertain” outlook.
The group, which reported a 28% increase in profits for last year, said it had almost completed a turnaround, kicked off four years ago after an accounting scandal and a slump in performance.
“It’s been a very, very good year,” said the chief executive, Dave Lewis. “We have strong plans and a very strong platform for the future.”
While shoppers were expressing “Brexit fatigue” in customer surveys, Lewis said, consumer markets remained stable and a rise in inflation in recent months was within industry norms.
“There has not been any softening or discernible change in buying behaviour in the [three months to the end of February] or the early part of this year.”
He said Tesco and its suppliers were being proactive in storing up non-perishable goods to prevent any hitches in supply during the Brexit process but there was no sign of stockpiling by shoppers “at any scale whatsoever”.
Pre-tax profits rose to £1.67bn in the year to 23 February as sales increased by 11.5% to £56.9bn including a 2.9% increase at Tesco’s UK stores and 11.1% rise at Booker, the wholesale business the retail group bought in 2017.
Profits growth was partly helped by thousands of job cuts and Lewis confirmed that up to 4,500 more jobs were to go with the closure of food service counters under plans already announced.
While sales fell back in central Europe and the group’s Thai business, Tesco said this was largely the result of changes in government policy in those countries or a deliberate move out of unprofitable products.
Lewis said there were no plans to exit any international markets and the company would reveal details about further growth opportunities to investors and analysts at a meeting in June.
“Whilst the market remains uncertain, our performance to date is strong, leaving us well positioned to invest in our competitiveness,” the company said.
