The pandemic has seen many supermarkets temporarily emptied of toilet paper, alongside a boost in grocery shopping as customers’ work-from-home patterns have persisted. As the pandemic slowly subsides, consumers could end up cutting their supermarket spending.
U.K.-based Tesco put a rosy view on its prospects in an earnings statement. The company said its sales have been “exceptionally strong” while it has nabbed a growing share of the U.K. market — “gaining customers from all key competitors.”
“While the pandemic is not yet over, we’re well-placed to build on the momentum in our business,” CEO Ken Murphy said on Wednesday (April 14). “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.”
However, the markets did not respond in a very rosy manner. Bloomberg reported that Tesco stock fell by as much as 4.4 percent. The stock of key competitors — such as J Sainsbury Plc and Wm Morrison Supermarkets Plc — fell as well.
For its part, the U.K. is just emerging from its third COVID-19 lockdown. Nonessential shops, pubs and restaurants with outdoor space are set to reopen in England and Wales this week. Indoor drinking and dining will resume next month. As the country reopens businesses, it is also forging ahead with one of the world’s top vaccination programs. This could mean that Britons will return to their workplaces, which could help boost indoor dining and other businesses.
Tesco’s fiscal year was from March through February 2021. Operating profit, at 1.8 billion pounds ($2.5 billion), was down from the previous year. The company said this was due to the added cost of operating during a pandemic, amounting to 900 million pounds.
On the other hand, Tesco was a real standout in the race to meet the growing demands of digital consumers. “We delivered a record Christmas across all of our formats and channels,” Murphy commented at the time.
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