Tesco sees sales rise by £3bn and online presence double despite 20% profit drop

A UK supermarket has reported that its profits for the last year have dropped by nearly 20 per cent despite an increase in sales.

Tesco, which has stores across the country, saw its profit before tax fall from £1,028m last year to £825m, a drop of 19.7 per cent.

The company said that the decrease was due to colleague bonuses and other exceptional items that it had implemented due to the impact of coronavirus.

However, the chain also reported that sales for the past year increased by more than £3bn, as group sales reached £53.4bn, up by 7.1 per cent from last year’s £49.9bn.

It added that its online presence has grown over the past year, with more than 5 million customers actively using its Clubcard app.

Ken Murphy, chief executive of Tesco, commented: “Tesco has shown incredible strength and agility throughout the pandemic. By putting our customers and colleagues first we have built a stronger business.

“I’d like to say a huge thank you to the entire team for rising so selflessly to every challenge they’ve faced. Their efforts have been truly heroic.

“While the pandemic is not yet over, we’re well-placed to build on the momentum in our business. We have strengthened our brand, increased customer satisfaction and improved value perception.

“We have doubled the size of our online business and through Clubcard, we’re building a digital customer platform. Sustainability is now an integral part of our business strategy and we’re doubling down on our efforts to reach net zero.

“Our decision to protect and hold the dividend flat for this financial year demonstrates our commitment to shareholders.

“We believe we can create significant further value for them and every stakeholder in our business by continuing to focus on value, loyalty and convenience for customers, underpinned by strong capital discipline.”