Tesco profits surge as virus fuels online food demand

London

BRITAIN'S biggest retailer, supermarket giant Tesco, announced on Wednesday a 42 per cent jump in net profit in its first half on soaring online demand for food during the coronavirus outbreak.

Profit after tax jumped to £460 million (S$806 million) in the six months to the end of August, compared with £324 million a year earlier, Tesco said in a statement.

This came despite exceptional costs of £533 million in response to the pandemic, notably the creation of 16,000 jobs to meet the growing online demand. Sales were fuelled by Britons increasingly switching from Tesco's largest stores to having their groceries delivered.

"Growth in the half was most marked in online with sales up 69 per cent, with the rate of growth reaching 90 percent during the second quarter," Tesco said.

Britain began emerging in June from a nationwide lockdown that had lasted nearly three months.

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Tesco added that sales at its small convenience stores grew 7.6 per cent in the reporting period, with people working from home grabbing, for example, a sandwich at lunchtime.

Sales grew 1.4 per cent in its big traditional stores visited by "customers seeking to shop less frequently whilst buying more on each visit", Tesco added.

"The first half of this year has tested our business in ways we had never imagined, and our colleagues have risen brilliantly to every challenge, acting in the best interests of our customers and local communities throughout," Tesco's new chief executive Ken Murphy said in the statement.

"We are absolutely committed to continuing to invest in value for customers and safety for all in these uncertain times," he added. AFP