For a while there it looked as though Tesco’s place as the king of grocery may have been under threat. Hampered by falling sales and an accounting scandal, in 2015 the supermarket posted a £6.4 billion pre-tax loss.
Tesco remains far short of its record £3.8 billion pre-tax profit in 2012 but having finally shaken off the shackles of said accountancy scandal, the group yesterday reported pre-tax profit of £1.3bn – eight times that of the previous year.
Given how this number has been dogged by exceptional charges relating to the scandal, a truer measure of Tesco’s performance is the 26% climb in pre-exceptional operating profit. When your business deals in billions that is all the more impressive.
Tesco’s offering has caught up with the market, and 260,000 additional customers coming through its doors seem to agree. A focus on fresh produce, and lower prices pushed UK sales up 2.2% on a like-for-like basis. This has come amid creeping food inflation and further market share gains from Lidl and Aldi, which continue to snap at the heels of the Big Four like a pair of energetic puppies.
So, while Mr Lewis may have told analysts that his job was not done, the recovery in the business since he took over in 2014 will have suitors lining up – with Unilever rumoured to be considering him as a replacement to Paul Polman.
Charles Wilson – who now owns 1% of Tesco – is a natural heir, having worked miracles at Booker to turn a failing business into one of the most consistent performers in the City. Now in charge of the group’s UK business, it very much seems to be an audition for the main role.
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