SHARE OF THE WEEK: Tesco set to announce half-year results
Customers and shareholders will be eager to receive the latest update from Tesco as supermarkets fight for the loyalty of budget-conscious shoppers.
Despite a 12.2% increase in shopping bills compared to last year, according to Kantar, major retailers have been slashing prices in recent months.
This price war has allowed Tesco to gain market share against competition from discounters Aldi and Lidl. Investors and analysts will be closely analyzing Tesco’s half-year results on Wednesday to assess this performance.
In the first quarter, Tesco experienced an 8.2% increase in revenue, reaching £14.8 billion. However, the company’s shares have declined since reaching the year’s high in May, so investors will be anticipating positive news from the half-year results.
Susannah Streeter, analyst at Hargreaves Lansdown, stated, “Tesco’s commitment to maintaining low prices is helping it fend off discount competitors, which should contribute to positive half-year numbers.
“Expanding the Aldi price match promotion has also proven successful in retaining customer loyalty and investors will be looking for this trend to continue.
“Inflation remains a significant challenge, and with some commodity prices remaining high, long-term relief may still be difficult to achieve.”
During the half-year results presentation, Tesco CEO Ken Murphy will likely face questions about the impact of shoplifting on the company and its employees amid concerns of a “theft and violence epidemic” in stores across the country.
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