Outside the City of London, reactions to Tesco PLC (LSE:TSCO) results were less positive, with the results seen as “astonishing corporate greed” and calls for the supermarket to be “working harder to make food more affordable”.
The FTSE 100 group reported an adjusted operating profit of £2.63bn, which dipped from the £2.83bn a year earlier, while cash flow rose 4% to £3.75bn, allowing the group to pledge another £750mln share buyback for investors.
Supermarket price inflation rose from 3.8% to 16.7% last year, according to industry figures, and hit a record 17.5% last month, most of which is being passed onto consumers, which the FTSE 100 grocer's management said was a sign the market is "rational" to nodding analysts.
However, with the costs of commodities, such as wheat, coffee and sunflower oil, all falling in the last year, and global wholesale food costs dropping for at least 10 consecutive months, there are clearly companies doing well in the gap between growers and consumers.
Last month Bank of England rate setter Catherine Mann warned that too many UK firms were continuing to raise prices, driving up UK inflation, despite the price of energy and imported goods falling.
Sue Davies, head of food policy at consumer group Which?, said the results “show Tesco is doing very well during the cost of living crisis, while millions of its customers struggle to put food on the table due to soaring grocery price inflation.
“It’s clear that Tesco and all the major supermarkets could be working harder to make food more affordable for customers who need help.”
She said the supermarket should also be making pricing “clearer, more transparent and more consistent", particularly on Clubcard offers, so consumers can easily compare prices in-store and with other supermarkets.
The results were also branded “another example of excessive profiteering fired up by astonishing corporate greed", by Sharon Graham, general secretary of the Unite trade union.
“It’s this rampant profiteering which is driving inflation, and cranking up the cost of living crisis for workers and their families.
“How can it be that at a time when millions of are struggling to feed their families Britain’s biggest supermarket is profiteering as never before. What sort of country have we become? Frankly, the latest results are obscene."