TESCO Interim Results Trading Statement 2023/24


Performance highlights2,3:H1 23/24H1 22/231Change at
actual rates
Change at
constant rates
Group sales (exc. VAT, exc. fuel)4£30,749m£28,241m8.9%8.4%
Adjusted operating profit5£1,482m£1,300m14.0%13.9%
     –     Retail£1,417m£1,248m13.5%13.5%
     –     Tesco Bank£65m£52m25.0%25.0%
Retail free cash flow6£1,368m£1,283m6.6% 
Net debt3,6£(9,888)m£(10,044)m1.6% 
Adjusted diluted EPS512.26p10.50p16.8% 
Interim dividend per share3.85p3.85p 
Statutory measures3: 
Revenue (exc. VAT, inc. fuel)£34,149m£32,519m5.0% 
Operating profit£1,482m£721m105.5% 
Profit before tax£1,217m£396m207.3% 
Retail cash generated from operating activities£2,068m£2,038m1.5% 
Diluted EPS12.83p3.27p292.4% 

Ken Murphy, Chief Executive:

“We know how challenging it is for many households across the country, as they continue to grapple with ongoing cost of living pressures. We are committed to doing everything we can to drive down food bills and Tesco is now consistently the cheapest full-line grocer.

Our investments in value, and in improving more than 1,100 own brand products from pasta to fresh fish, are helping us to offer outstanding quality at great prices, all underpinned by market-leading availability. Customers are responding well, contributing to market share gains in store and online. We’re seeing the results at both ends of the basket, with strong growth in our Finest range as shoppers look to save by treating themselves at home, voting with their feet as they switch from premium retailers to Tesco.

This relentless focus on customers, combined with significant cost reductions from our Save to Invest programme, has driven our strong performance in the first half of the year. Food inflation fell across the half and while external pressures remain, we expect that it will continue to do so in the second half of the year. We are in a strong position to keep investing for customers, and will continue to lower prices wherever we can – doing everything in our power to make sure customers can have a fantastic, affordable Christmas by shopping at Tesco.”

Delivered strong financial performance driven by relentless focus on value for customers:

  • Strong sales across the Group, with Retail LFL7 sales up 7.8%; inflation fell across the half, with volume and sales mix trends ahead of expectations:
    • UK & ROI LFL sales up 8.4%, including UK up 8.7%, ROI up 6.9% and Booker up 7.5%
    • C.Europe LFL sales up 0.9% reflecting strength of LY base and market volume contraction due to sustained high inflation
  • Retail adjusted operating profit5 £1,417m, up 13.5% at constant rates, including Save to Invest delivery of c.£290m
    • UK & ROI adjusted operating profit £1,371m, up 17.2%, with accelerated cost savings and a resilient volume performance offsetting significant cost pressures
    • Central Europe adjusted operating profit £46m, down (41.8)% due to a significant decline in Hungary driven by the impact of currency devaluation on input costs and regulatory actions; Slovakia and Czech Republic performing well
  • Tesco Bank adjusted operating profit £65m, up 25.0%, primarily driven by strong income growth; £250m special dividend returned to the Group reflecting the strength of Bank’s balance sheet
  • Strong retail free cash flow6 £1,368m, including a positive working capital inflow of £368m
  • Net debt3,6 improved by £605m since year-end due to strong cash flow & Bank special dividend; net debt/EBITDA ratio 2.3x
  • Interim dividend per share of 3.85p, in line with our interim dividend policy at 35% of prior year full year dividend

Statutory profit performance reflects prior year impairment charge:

  • Statutory revenue £34.1bn, up 5.0% at actual rates, with fuel sales down (20.5)% due to lower retail prices
  • Statutory operating profit £1,482m, up 105.5% and profit before tax £1,217m up 207.3%, primarily reflecting last year’s £(626)m non-cash impairment charge, with no charge in the first half of the current year, and strong trading performance

Continuing to offer customers great value, underpinned by focus on quality:

  • Consistently the cheapest of the full-line grocers across the half, with our powerful combination of Aldi Price Match on more than 650 lines, over a thousand Low Everyday Prices locked to January 2024 and exclusive Clubcard Prices deals
  • Prices cut on c.2,500 products by the end of the half, from bread to broccoli, with average saving of c.12%
  • Clubcard Prices on over 8,000 products across the store, saving customers up to c.£390 per year
  • Investment in quality and product innovation, launching 335 brand new products and reformulating 1,150
  • Net switching gains from premium retailers for 13 consecutive periods; further strengthened Finest offer leading to both sales and volume growth; launched more than 150 brand new Finest products
  • Introduced more affordable own brand products in Express stores; savings of up to 40% vs. the products they replaced
  • Strong market share performance: UK up +30bps, with gains in both stores and online; ROI market share up +70bps
  • Market-leading availability, up +7ppts YoY; Brand NPS +2pts YoY, driven by improvements in range & shopping experience

Creating long-term, sustainable value for all Tesco stakeholders:

  • Continued strong focus on customer satisfaction, market share and cash, ensuring we balance all stakeholders’ needs
  • Biggest investment in pay and new wellbeing services for colleagues, including launch of virtual GP appointments
  • Enhanced sourcing capabilities, working with suppliers to unlock savings for customers; #1 in Advantage supplier survey for eighth consecutive year
  • Launched Stronger Starts grants programme to help 5,300 schools give children a healthier, stronger start in life
  • One of the first companies globally to validate ambitious net-zero science-based targets on all GHG emissions, including Scope 3; introduced 500th electric home delivery van into fleet


In April this year we announced our commitment to buy back a total of £750m worth of shares by April 2024. We purchased £503m worth of shares in the first half and will purchase the remaining shares by April.

Since launching our ongoing capital return programme in October 2021, we have now purchased a total of almost £1.6bn worth of shares. We continue to see the buyback programme as an ongoing and critical driver of shareholder returns, reflecting the strength of our balance sheet and our confidence in delivering strong future cash flows.


Looking forward, we will continue to prioritise investment in our customer offer, working with our supplier partners to reduce prices wherever we can whilst delivering the outstanding quality our customers expect.

This relentless focus on customers, combined with significant cost reductions from our Save to Invest programme, resulted in a strong performance in the first half of the year which means we now expect to deliver between £2.6bn and £2.7bn retail adjusted operating profit for the 2023/24 financial year. We also now expect to generate retail free cash flow of between £1.8bn and £2.0bn this year, ahead of our medium-term guidance range of £1.4bn to £1.8bn.

We continue to expect Bank adjusted operating profit of between £130m and £160m.


We remain focused on delivering on our four strategic priorities. We are committed to supporting our customers with great quality, value and convenience, whilst ensuring we reward them for their loyalty. Our brilliant colleagues, unrivalled reach and strong supplier relationships mean we can serve our customers whenever, wherever, and however they need us. Our priorities guide us to drive top-line growth, grow profit and generate cash, and in doing so, deliver for all of our stakeholders.

We have made further progress against our strategic priorities during the half:

1) Magnetic Value for Customers – Re-defining value to become the customer’s favourite

  • Further strengthened our market-leading combination of Aldi Price Match, Low Everyday Prices and Clubcard Prices, enabling us to be the cheapest of the full-line grocers across the half
  • Led the way on passing on savings to customers, applying new capabilities developed within our sourcing team to capture cost price reductions ahead of the market
  • Continued to elevate the importance of quality and innovation within our product range, improving our competitiveness and performance against premium retailers
  • Further improved our convenience offering, increasing the number of own brand products in Tesco Express, driving up fresh participation in One Stop and increasing sales of Jack’s to Booker’s retailer customers
  • Locked prices on 650 essential Booker catering products over key summer trading period; 700 now locked to Christmas
  • Continued commitment to healthy, affordable diets; committed to not sell HFSS products on volume-led promotions; Better Baskets supports our commitment to achieve 65% healthy volume sales by 2025

2) I Love my Tesco Clubcard – Creating a competitive advantage through our powerful digital capability

  • Customers benefiting from Clubcard across the Group; Clubcard sales penetration up in all businesses: UK 80%, ROI 80%, Central Europe 85%, Mobile 86% and Bank 67%
  • World-class Tesco app with 16m users across the Group (12.8m in UK, 0.8m in ROI and 2.5m in CE)
  • 7.5m UK customers using digital Clubcard at till, up 62% YoY; 15.4m UK customers opting into e-statements, up 57% YoY
  • 86m personalised coupons issued to nearly 6m customers this half; trialling a broader range of personalisation to support in-store shopping experience via Scan as You Shop
  • Expanding digital platform; added >750 in-store screens; >300 suppliers using our online sponsored search functionality

3) Easily the Most Convenient – Serving customers wherever, whenever and however they want to be served

  • Online performance continues to outpace market, share up +71bps YoY; switching gains from online competitors
  • Strengthened online availability to 97.6%; number of ‘perfect orders’ up +12ppts YoY
  • Opened a further three UFCs since February, adding 1m order capacity per year; now at nine UFCs in total
  • Tesco Whoosh now in 1,414 stores, making rapid delivery available to c.60% of population; now offering larger baskets
  • Launched ‘Chef Central’ in Booker, offering multi-site national and regional customers the ability to offer standardised menus through a defined product range, with great value products delivered directly to their doors
  • Opened 33 stores across the Group (16 Express & 11 One Stop stores in UK, one new superstore in ROI and five new stores in C.Europe); working with 143 net new Booker retail partners
  • Introduced 500th electric customer home delivery van; fleet to be fully electric in the UK by 2030

4) Save to Invest – Significant opportunities to simplify, become more productive and reduce costs

  • Another strong Save to Invest performance, delivering c.£290m in the half, with a target to deliver a total of c.£600m by year-end, contributing to at least £1.1bn cumulative savings between February 2022 February 2024
  • Making progress across all areas: goods & services not for resale, property, operations and central overheads
  • Optimised management structures launched in over 800 large stores, including introduction of 1,700 Shift Leader roles
  • Continued streamlining of Express checkouts, with increased proportion of self-service, upgraded colleague-operated checkouts and additional accessible service desks
  • End-to-end review of promotional replenishment to strengthen availability and deliver efficiency gains
  • Further energy consumption initiatives delivered in the half, including upgraded LED lighting


26 weeks ended 26 August 20232,3:H1 23/24H1 22/231Change at actual ratesChange at constant rates
Sales (exc. VAT, exc. Fuel)4£30,749m£28,241m8.9%8.4%
   Revenue (exc. VAT, inc. fuel)£34,149m£32,519m5.0%4.6%
Adjusted operating profit5£1,482m£1,300m14.0%13.9%
Adjusting items£(579)m  
Statutory operating profit£1,482m£721m105.5% 
Net finance cost£(269)m£(327)m  
Joint ventures and associates £4m£2m  
Statutory profit before tax£1,217m£396m207.3% 
Group tax£(288)m£(144)m  
Statutory profit after tax£929m£252m268.7% 
Adjusted diluted EPS512.26p10.50p16.8% 
Statutory diluted EPS12.83p3.27p292.4% 
Interim dividend per share3.85p3.85p – 
Net Debt3,6£(9,888)m£(10,044)m 1.6% 
Retail free cash flow6£1,368m£1,283m 6.6% 
Capex8£523m£448m 16.7% 

Group sales4 increased by 8.4% at constant rates, with growth across all segments. The impact of inflation was evident across all markets, although eased across the half as we worked hard to ensure that savings from falling global commodity prices were passed onto customers. Customer demand held up well in response to our ongoing focus on offering great value and quality and sales volumes were stronger than we had anticipated. Group revenue increased by 4.6% at constant rates, including a (20.6)% decline in fuel sales, primarily due to lower selling prices year-on-year.

Group adjusted operating profit5 increased by 13.9% at constant rates, with Save to Invest contributing a further c.£290m of cost savings in the half. We effectively managed the inflationary pressures in our cost base and customer demand was resilient as we invested further in value.

Group statutory operating profit increased by 105.5% year-on-year, primarily due to a £(626)m non-cash impairment charge in the prior year driven by an increase in discount rates, combined with the strong trading performance mentioned above. Discount rates have remained largely stable since February, and there was no impairment charge or release in the first half.

Net finance costs decreased by £58m year-on-year primarily due to fair value remeasurements related to the mark-to-market movement on index-linked swaps, which led to a £28m credit this year compared to a £(75)m charge in the prior year.

The higher tax charge this year was mainly driven by the increase in UK corporation tax rates effective from April, in addition to higher retail operating profits.

Our adjusted diluted EPS5 increased by 16.8%, due to higher retail operating profits and the ongoing benefit from our share buyback programme. We have announced an interim dividend of 3.85 pence per ordinary share, in line with last year and our interim policy to pay 35% of the prior full-year dividend.

We generated £1,368m of retail free cash flow6, including a working capital inflow of £368m. Net debt3,6 reduced by £605m since the prior year end, driven by strong retail free cash flow and a £250m special dividend from the Bank, partially offset by the cash returned to shareholders via both our ongoing share buyback programme and final dividend. The net debt/EBITDA ratio was 2.3 times, compared to 2.6 times as at 25 February 2023.

Further commentary on these metrics can be found below and a full income statement can be found on page 16.


  1. Comparatives have been restated for the adoption of IFRS 17 Insurance Contracts. Refer to Notes 1 and 20 for further details.
  2. The Group has defined and outlined the purpose of its alternative performance measures, including its performance highlights, in the Glossary starting on page 46.
  3. All measures apart from Net debt are shown on a continuing operations basis unless otherwise stated. Further information on Net debt can be found in Note 18 on page 41.
  4. Group sales exclude VAT and fuel. Sales change shown on a comparable days basis for Central Europe.
  5. Adjusted operating profit and Adjusted diluted EPS exclude Adjusting items.
  6. Net debt and Retail free cash flow exclude Tesco Bank.
  7. Like-for-like is a measure of growth in Group online sales and sales from stores that have been open for at least a year (at constant exchange rates, excluding VAT and fuel).
  8. Capex excludes additions arising from business combinations, property buybacks (typically stores) and store purchases. Refer to page 46 for further details.


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