Tesco has revealed that its profits tumbled by around a fifth over the past year after coronavirus costs of almost £900 million offset surging sales.
The supermarket giant said on Wednesday morning that pre-tax profits slid to £825 million for the 12 months to February, compared with £1.03 billion the previous year.
It said profits were weighed down by £892 million in Covid-related costs and the company’s decision to hand £585 million in business rates relief back to the Government.
It had benefited from a jump in demand for groceries during the pandemic, with more meals eaten at home amid restrictions on the hospitality sector and changes to working habits.
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Tesco Preliminary Results 2020/21: Incredible team effort in an exceptional year. Well-placed to build on momentum.
— Tesco News (@tesconews) April 14, 2021
Group sales excluding fuel increased by 7% to £53.4 billion for the year, buoyed by soaring online sales.
Online sales jumped by 77% to £6.3 billion in the UK as the company doubled delivery capacity to meet rising demand from housebound customers.
Chief executive Ken Murphy said: “Tesco has shown incredible strength and agility throughout the pandemic.
“By putting our customers and colleagues first, we have built a stronger business.
“While the pandemic is not yet over, we’re well-placed to build on the momentum in our business.
“We have strengthened our brand, increased customer satisfaction and improved value perception.”
