Tesco Raises Annual Profit Forecast After Strong First-Half Sales

Tesco raised its annual underlying profit forecast to between £3.15 billion and £3.3 billion, up from a previous estimate of at least £3 billion. The UK's largest grocer reported first-half sales of £33.8 billion, representing a 1% like-for-like increase overall and a 1.5% increase within the UK. Adjusted operating profit for the period ending August 29 rose 6.3% to £1.8 billion.

Growth was primarily driven by an 8.4% surge in UK online sales and a 37% increase in its Whoosh rapid delivery service. The company also saw a 9% increase in sales for its premium Finest range. Conversely, the Booker wholesale arm experienced a 2.6% decline in sales. Fuel sales grew by nearly 20% year-on-year, which the company attributed to higher oil prices.

To improve efficiency, the company integrated artificial intelligence into its operations, launching a customer meal planning assistant in September and using AI for energy efficiency and stock replenishment. While the company previously warned that conflict in Iran could depress profits, it noted that consumer confidence has remained relatively resilient despite ongoing geopolitical tensions and economic uncertainty.