Tesco: turnaround “on track”

Tesco, the UK’s biggest food and drink retailer, has boasted its turnaround is on track as it saw group sales rise 3.3% in the first half of the year.

Group sales hit £25.2 billion in the first half, up 3.3%, the seven quarter it has posted growth, with UK like-for-like sales rising 2.2% and transactions also up, by 0.4%.

The retailer also saw group operating profits of around £759 million, a rise of 27.3% across the business, with the UK and Republic of Ireland accounting for £471 million. As a result, it resumed

Chief executive Dave Lewis said the retailer was continuing to make strong progress.

“Sales are up, profits are up, cash generation continues to strengthen and net debt levels are less than half what they were when we started our turnaround three years ago,” he pointed out, saying that this rested on the focus it had placed on serving shoppers better. “Our offer is more competitive and more customers are shopping at Tesco.”

As a result, the retailer announced it was resuming paying a dividend, which reflected confidence that it could build on the strong performance and create long-term, sustainable value for its stakeholders.

Tesco also reported cost savings of around £259 million and net debt fell 25% to £3,260 million, while the health of the brand had also improved, it noted. 

However little was said about the proposed merger with Booker, which is currently being investigated “in depth” by the Competition and Markets Authority.

In the latest KantarWorldpanel data, Tesco continued to see growth, with sales rising 2.7% in the 12 weeks to 10 September 2017, to as it entrenched its resurgence, despite its market share dipping by 0.3 percentage points to 27.8%,

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