Annual profits at Tesco have surged 160 per cent to £2.3billion as millions of Britons struggled to afford food and farmers said they were in crisis.
The increase announced by the supermarket triggered accusations of profiteering amid the biggest cost of living squeeze since the Second World War.
Tesco confirmed today that pre-tax profits increased from £882million a year earlier, when it had been impacted by an almost £1billion one-off impairment.
Britain's biggest retailer claimed its success was built on offering good value to shoppers in a year when food price inflation peaked at 19.2 per cent in March.
The rate of increase fell back to 5 per cent in February this year with hopes of further falls this year. But Tesco bosses say the figure could be 'sticky' given increases in the costs of coffee, cocoa, potatoes and some other veg due to the impact of flooding.
Millions of people have changed their shopping habits in response to the cost of living crisis by, for example, switching to cheaper own brands offered by Tesco.
At the same time, the Office for National Statistics (ONS) found poorer households have seen parents ration their own food intake, skipping meals, in order to put meals on the table for children.
Separately, farmers have mounted a series of tractor protests over claims - among other things - supermarkets are failing to pay them a fair price.
Liz Webster, the founder of Save British Farming, said: 'The news of these massive Tesco profits has rubbed salt into British farmers' very sore wounds.
'Many British farmers are struggling to survive mainly due to supermarkets forcing down farm gate prices, assisted by Brexit opening up opportunities for substandard imports to undercut our high quality British food.'
Just recently, the Competition & Markets Authority raised concerns that petrol retailers, which include supermarkets, have inflated the profit margins they are making on fuel.
Grocery industry analyst Steve Dresser, of Grocery Insight, said Tesco had posted 'great results', but he added: 'It won't help the accusations of profiteering, however.'
At the same time, there was a backlash on social media.
Food justice campaigner Lucy Antal posted: '£160m profit for Tesco, nearly 3000 food banks.. Something's not quite in balance.'
Another wrote: 'Disgusting... Continually taking people in the UK for a ride with over inflated food prices so their directors and shareholders can get their money.'
A third critic complained: 'So all those price increases were just to take money off ordinary people to give to share holders.'
It has emerged that Tesco plans to use £1billion of profit to buy back shares in a windfall for shareholders.
The 160 per cent increase in the pre-tax profit was inflated by the fact that the figure for the previous year was driven down by a so-called impairment charge of £980m.
The adjusted operating profit figure for Tesco was up a still impressive 12.8 percent to £2.8billion for the 52 weeks to February 24 this year.
This was achieved on the back of a 7.4 per cent rise in group sales - excluding VAT and fuel - taking them up to £61.5billion.
Tesco chief executive Ken Murphy said the supermarket had 'worked hard' to reduce prices for shoppers.
He pointed to the chain's Aldi Price Match scheme, plus its 'Low Everyday Prices' promotions and the discounts available to holders of its Clubcard.
Tesco said it cut prices on more than 4,000 products during the year, with an average drop of 12 per cent.
However, independent analysis by the ONS shows high street food prices are up 5 per cent on a year ago.
Mr Murphy said: 'Customers are choosing to shop more at Tesco, which is reflected in growing market share as they respond to the improvements we've made to the value and quality of our products.
'Inflationary pressures have lessened substantially, however we are conscious that things are still difficult for many customers, so we have worked hard to reduce prices and have now been the cheapest full-line grocer for well over a year.'
He said Tesco is grabbing customers from premium rivals thanks to its Finest range where sales rose 15.7 per cent to more than £2billion.
Richard Hunter, head of markets at Interactive Investor, said: 'Tesco has again cemented its position as the pre-eminent grocer of the British aisles, driven by a relentless focus on both value and quality.
'It's appetite for lowering prices for customers is enabled by its sheer scale and strength.'
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2024-04-10 15:35:07Z
CBMiY2h0dHBzOi8vd3d3LmRhaWx5bWFpbC5jby51ay9uZXdzL2FydGljbGUtMTMyOTMyMjMvVGVzY28tcHJvZml0cy1jb3N0LWxpdmluZy1jcmlzaXMtc3VwZXJtYXJrZXQuaHRtbNIBZ2h0dHBzOi8vd3d3LmRhaWx5bWFpbC5jby51ay9uZXdzL2FydGljbGUtMTMyOTMyMjMvYW1wL1Rlc2NvLXByb2ZpdHMtY29zdC1saXZpbmctY3Jpc2lzLXN1cGVybWFya2V0Lmh0bWw
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