Positive like-for-like sales and volume growth in all regions across the Group
• UK like-for-like sales growth of 0.6% and Group like-for-like sales growth of 1.0%1
• UK volumes up 2.1%; UK transactions up 1.6%
• International volumes up 3.3%; International transactions up 0.3%
Significant progress against all three priorities
• Competitive in the UK – all key customer metrics improving relative to the market
• More secure balance sheet – net debt reduced by further £0.8bn since year-end
• Rebuilding trust – brand health returned to highest level in more than four years2
Customer, colleague and supplier partner measures all improving
• Most improved retailer in terms of customer recommendations3
• 78% of colleagues recommend us as a ‘great place to work’ (up from 70% in 1H 2014/15)
• Very strong improvement in UK supplier satisfaction measure at 78% (up from 51% in 2014/15)
Well-placed against our plans – on track to deliver £1.2bn Group operating profit before exceptional items for the full year
• Rebuilding profitability whilst investing in our customer offer
• Group operating profit before exceptional items up 60% in the first half
• Exclusive fresh food brands performing ahead of plan; investment part-offset by mix benefit
Sharing our ambition to deliver 3.5-4.0% Group operating margin by 2019/20
• Underpinned by six strategic drivers, we will strengthen our customer offer whilst creating long-term, sustainable value for shareholders
• Includes £1.5bn further operating cost reductions, to be realised through a more efficient and responsive distribution system, a simpler store operating model & goods not for resale savings
• Total capex will average £1.4bn per year to support this programme
Statutory results: statutory revenue £27.3bn, up 1.4%; statutory profit before tax £71m, down (28.3)%
1. Like-for-like is the growth in sales from stores that have been open for at least a year at a constant foreign exchange rate and includes online sales.
2. As per YouGov BrandIndex, August 2016.
3. As per the periodic Customer Spotlight Tracker.
Dave Lewis, Chief Executive:
“We have made further strong progress in the first half, with positive like-for-like sales growth across all parts of the Group as we re-invest in our customer offer whilst rebuilding profitability in a sustainable way.
The entire Tesco team is focused on serving shoppers a little better every day. We are more competitive across our offer. Prices are more than 6% lower than two years ago, availability and service have never been better and our range is more compelling. Our new fresh food brands are performing ahead of expectations, improving our value proposition and further removing reasons for customers to shop elsewhere.
Whilst the market is uncertain, we have made significant progress against the priorities we set out two years ago, stabilising the business and positioning us well for the future. Today, we are sharing the plans we have in place to become even more competitive for our customers, even simpler for colleagues and an even better partner for our suppliers, whilst creating long-term, sustainable value for our shareholders.”