Tesco profits plunge 20% as Covid costs cancel out pandemic sales boost

Revenues hit £53.4bn but supermarket chain weighed down by £895m of coronavirus-related expenditure

Ben Chapman
Wednesday 14 April 2021 10:41
Comments
<p>Tesco benefited from a jump in sales as non-essential shops and restaurants closed down for much of the year</p>

Tesco benefited from a jump in sales as non-essential shops and restaurants closed down for much of the year

Tesco’s profits fell by by a fifth over the past year as £900m of costs relating to coronavirus outweighed surging sales.

The UK’s largest supermarket chain revealed pre-tax profits dropped to £825m in the year to February down from £1.03bn.

Tesco said profits had been reduced by the decision to hand back £585m of business rates relief to the government. The company also booked £892m of Covid-related expenditure including making its stores safer.

Like all supermarkets, Tesco benefited from a jump in sales as non-essential shops and restaurants closed down for much of the year.

Sales excluding fuel rose 7 per cent to £53.4bn for the year, with online shopping accounting for much of the rise.

Online sales rose 77 per cent to £6.3bn in the UK as Tesco doubled delivery capacity to meet rising demand from housebound customers.

Some 16,000 staff taken on during the pandemic were given permanent jobs last year, including 10,000 pickers, who select and pack orders, and 3,000 drivers.

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.

“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.”

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Please enter a valid email
Please enter a valid email
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Please enter your first name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
Please enter your last name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
You must be over 18 years old to register
You must be over 18 years old to register
Opt-out-policy
You can opt-out at any time by signing in to your account to manage your preferences. Each email has a link to unsubscribe.

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Join our new commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in