Tesco’s preliminary results for 2020/21 have been released showing profits at £1990million, a drop of 14.7% but a growth of +6.3% in overall sales.

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

He added: “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.”

Fraser Thorne, CEO and founder of investment research company, Edison Group, told Food Management Today: “Tesco’s performance over the pandemic has translated into a strong set of preliminary results for 2020/21. Sales have grown by 7.1% up to £53.4bn however profits have taken a slight hit down 14.7% to £1990m. The drop in profits can largely be attributed to the extra rise in trading costs as the pandemic hit with limits to supermarkets capacity and supply chain issues at the start of the pandemic, both playing a part in this drop in profits. 

“Overall, these are a solid set of financial results as Tesco grew its UK market share in the year. Its launch and extension of its Aldi price match to over 500 lines in March 2020 is a key factor to this growth, fighting back against the low-cost supermarkets that have seen such success over the past few years. With the pandemic having shifted many customers to online shopping, Tesco saw its capacity double to over 1.5m slots per week. This, coupled with its target of 25 new urban fulfilment centres to cater for this growth, means its online business is in great shape for the year ahead. 

“As the country emerges from lockdown, Tesco and other supermarket retailers are in a solid position. Seeing how they weathered the initial storm, the easing of restrictions is only likely to benefit them further. Overall, word from the company is positive, and profitability is expected to grow as trading conditions remain volatile for the foreseeable future.”