Strong trading performance built on consistent and competitive offer, leading to strong retail free cash flow:

  • Retail7 LFL sales up +3.2% following strong performance throughout pandemic; 1-yr UK & ROI LFL reflects post-pandemic normalisation & cost-of-living changes in customer behaviour; strong Booker growth in catering & retail
  • Statutory revenue £32.5bn, up +6.7% including strong growth in fuel sales
  • Total adjusted retail operating profit5 £1,248m, down (10.0)% at constant rates
    • UK & ROI adjusted operating profit £1,169m, down (11.5)% mainly due to the impact of reduced YoY volumes as a result of post-pandemic normalisation, in addition to net cost inflation and our ongoing investment in the customer offer
    • C.Europe adjusted operating profit £79m, up +19.1% as volumes remained strong despite significant inflation
  • Bank adjusted operating profit £67m, down (6.9)% driven primarily by up-front charges on new business
  • Statutory operating profit £736m, after £(626)m non-current asset impairment charge driven by higher discount rates
  • Strong retail free cash flow6 £1,283m; YoY decline reflects last year’s exceptionally strong performance
  • Net debt2,6 reduced by £0.5bn since February driven by strong cash generation; net debt ratio stable at 2.5x
  • Adjusted diluted EPS5 10.67p, down (4.9)% due to lower profit part offset by reduced tax; statutory diluted EPS 3.44p
  • Interim dividend of 3.85p, up +20.3%, in line with policy at 35% of prior year’s full year dividend

Supporting customers through relentless focus on value:

  • Solid UK market share performance, in line with expectations reflecting normalisation & with less inflation than market
  • Competitiveness of offer recognised by customers in a tough market: Brand NPS now highest of the full-line grocers
  • Powerful combination of Aldi Price Match, Low Everyday Prices and Clubcard Prices helping ease cost-of-living pressures, leading to most competitive price index vs. limited-range discounters to date
  • Helping customers spend less by eating-in, with +13% YoY increase in Finest range; quality perception +208bps
  • Accelerating Save to Invest to help mitigate cost inflation; c.£0.5bn this year & c.£1bn cumulative by Feb-24, 1 yr early

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

  • Strong and ongoing focus on customer satisfaction, market share and cash, ensuring we balance all stakeholder needs
  • Biggest single-year investment in colleague pay, in addition to increase announced today for our UK stores; further support includes extended discount allowance, increased access to hours & free food in colleague rooms
  • Working together with supplier partners to mitigate inflation, helping customers with unparalleled financial pressures
  • Daily donations to support unprecedented foodbank demand in our communities – over 20m meals provided in H1
  • Ongoing commitment to return capital; £450m returned to shareholders since April; cumulative £750m since Oct-21

Ken Murphy, Chief Executive:

“We know our customers are facing a tough time and watching every penny to make ends meet.  That’s why we’re working relentlessly to keep the cost of the weekly shop as affordable as possible, with our powerful combination of Aldi Price Match, Low Everyday Prices and Clubcard Prices, together covering more than 8,000 products, week in, week out.  We’re also investing significantly in our colleagues, with a further boost to pay announced today for our UK stores.  I want to say a big thank you to the whole Tesco team, and our supplier partners – together, we have built a more resilient, consistent business that’s well set up for the future.

By staying laser-focused on value and sticking to our strategy of inflating a little bit less and a little bit later, our price position has got even more competitive.  Customers are seeking out the quality and value of our own brand ranges as they work to make their money go further, whether they are switching from branded products, between categories or cutting back on eating out.

As we look to the second half, cost inflation remains significant, and it is too early to predict how customers will adapt to ongoing changes in the market.  Despite these uncertainties, our priorities are clear.  We have the right long-term strategy and we will continue to balance the needs of all of our stakeholders.  Most importantly, we will stay focused on delivering value for our customers and supporting them in every way we can.”


In April, we provided a wider than usual range of profit guidance for the 2022/23 financial year, given significant uncertainties in the external environment.  Since then, post-pandemic normalisation has been compounded by cost-of-living driven changes in customer behaviour.  Cost inflation is significant and we have continued to invest to support our customers and colleagues.  However, our solid trading performance and acceleration of our Save to Invest programme have contributed to a strong financial result for the first half.

As a result, despite ongoing challenges in the market, we are able to maintain our profit guidance within our previous range, albeit towards the lower end.  We therefore expect full year retail adjusted operating profit of between £2.4bn and £2.5bn.  Significant uncertainties in the external environment still exist, most notably how consumer behaviour continues to evolve.

Our strong and ongoing focus on cash and a more positive expectation on working capital leads to an upgrade in our expectation for full year retail free cash flow to be at least £1.8bn.

We continue to expect Bank adjusted operating profit of c.£120m to £160m.


In April, we committed to buying back a total of £750m worth of Tesco shares by April 2023 as part of our ongoing capital return programme.  Since then, we have purchased £450m worth of shares and will continue to purchase the remaining £300m worth over the coming months.

This means that, by April 2023, we will have bought back a cumulative £1.05bn worth of shares since the start of the programme in October 2021.


Our strategic priorities help us support customers by offering great value, quality and convenience, and rewarding loyalty, all of which are paramount in the current environment.  We have a unique position through our reach and capability that makes us best-placed to continue to deliver for all our stakeholders, through our ongoing focus on customer satisfaction, market share and cash.  Our brilliant colleagues and the strength of supplier relationships mean that we can serve our customers however they need us, whilst also driving long term, profitable growth in the business.

Our multi-year performance and capital allocation frameworks continue to guide our actions, creating sustainable, long-term value for all Tesco stakeholders.  We are making good progress against our strategic priorities:

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

  • Relentless focus on value for customers, supported by our market-leading combination of:
    • Aldi Price Match: strongest price commitment in market; in 99% of all large baskets and over 80% of top-up shops
    • Low Everyday Prices: over a thousand everyday products now locked at low prices until 2023
    • Clubcard Prices: helping customers spend less on groceries, clothing, general merchandise, Mobile & Tesco Bank
  • Ongoing price investment leading to most competitive position vs. limited-range discounters to date
  • Strengthened premium offering, increasing Finest range +13% YoY; quality perception +208bps YoY (vs market +77bps)
  • Strong relationships with suppliers recognised: No. 1 in Advantage supplier survey for seventh consecutive year
  • Continued focus on sustainability: saved 12m pieces of plastic/yr by removing multipack wrap from own brand drinks; launched ‘Better Baskets’ helping customers make healthy & sustainable choices without conceding on price; introduced eight solar-powered refrigerated trailers and launched first electric city-centre store delivery lorry

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

  • Clubcard satisfaction score up +505bps YoY; Clubcard generosity perception score up +359bps YoY
  • Digital personalised rewards extended to 2.0m Clubcard customers; 17.2m targeted in-app coupons issued to date
  • Clubcard sales penetration increased by +9.8ppts and +18.6ppts in ROI & C.Europe YoY respectively
  • Number of customers accessing Clubcard via app now at 10m in UK, 0.3m in ROI and 1.0m in C.Europe
  • Tesco Media & Insights platform powered by dunnhumby now working with over 450 consumer goods brands

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

  • Online sales and orders both remain >50% ahead of pre-COVID levels
  • Leading online market share resilient at 35.9%, even as overall online volumes continue to normalise
  • Continued roll out of Click & Collect sites, now within 25min drive of >70% of UK households; kerbside collection now in 180 Click & Collect locations
  • Fifth UFC opened in Rutherglen; fastest capacity ramp up to date in just eight weeks; fulfilling >3,600 orders/wk
  • Opened 17 Tesco Express stores, 5 One Stop stores, 54 Booker Retail Partner stores and 141 Premier stores
  • Continued roll out of ‘Tesco Whoosh’ superfast delivery service, now in over 400 sites; plan to get to 800 by year end

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

  • Strong progress across all four streams: goods & services not for resale, property, operations, & central overheads
  • Now expecting to deliver accelerated savings this year of c.£500m, partially mitigating significant cost pressures
  • Seeking to deliver original three year plan 12 months early: now targeting c.£1bn cumulative savings by end of Feb 2024
  • Simplified stock and replenishment routines rolled out in store, freeing up 47,000 hours
  • Additional self-service checkout roll out driving efficiency and improved customer experience
  • Improved ROI fleet utilisation, better C.Europe depot utilisation and increased use of Bengaluru shared services team


Group sales4 increased by +3.5% at constant rates, with sales growing across all segments following on from a strong performance throughout the pandemic.  Sales growth strengthened in the second quarter as general market inflation increased, in addition to very resilient demand in Central Europe and Booker.  Revenue increased by +7.0% at constant rates, including fuel sales growth of +38.7% driven by inflation across the market and higher volumes.

Group adjusted operating profit5 decreased by (9.8)% at constant rates, reflecting the impact of post-pandemic normalisation on food volumes and lower non-food sales following high demand in the first quarter last year.  We saw significant cost inflation and some impact from a step up in own brand sales vs branded ranges as customers took steps to manage the pressure on their household budgets.  These impacts were partially mitigated by the acceleration of our Save to Invest programme, a strong Booker sales performance, particularly in the catering business, and a reduction in COVID-19 related costs year-on-year.

Group statutory operating profit reduced by (43.6)% year-on-year due to the operating profit impacts above and an increase in adjusting items, principally driven by a £(626)m non-cash non-current asset impairment charge related to an increase in discount rates this year.

Net finance costs increased by £(167)m year-on-year primarily due to fair value remeasurements related to the mark-to-market movement on inflation-linked swaps, which led to a £(75)m charge this year compared to a £180m credit in the prior year.  The increase in our share of profit from joint ventures and associates was due to an increase in profits from UK property joint ventures and a reduction in losses generated by our joint venture in India.  The reduction in tax this year primarily reflects the reduction in retail operating profits and a one-off charge in the prior year related to the revaluation of deferred tax.

Our adjusted diluted EPS5 declined by (4.9)%, as the impact of the year-on-year reduction in retail operating profits was partly offset by a lower tax charge and the benefit of our ongoing share buyback programme.  We have announced an interim dividend of 3.85 pence per ordinary share, an increase of +20.3% year-on-year, set in line with our policy at 35% of the prior full-year dividend.

Net debt2,6 reduced by £472m since the year end, driven by strong cash generation and after the outflow relating to our ongoing share buyback programme.  We generated £1,283m of retail free cash flow6, including a working capital inflow driven by higher trade balances.  This reflects a reduction of £(260)m year-on-year due to an even higher working capital inflow last year, driven by a sharp recovery in fuel and non-food volumes in the UK.  The net debt/ EBITDA ratio was 2.5 times, the same as at the year end, as lower levels of net debt were offset by lower Retail EBITDA.


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