London (AFP) – Britain’s biggest supermarket chain Tesco warned Thursday that its profits could be impacted by the Mideast war lifting food costs, as it posted higher earnings for its last financial year. Tesco said adjusted operating profit for 2026/27 could come in lower compared with the 12 months to the end of February. The figure is forecast to reach between £3 billion and £3.3 billion ($4.1 billion and $4.5 billion), having risen slightly to £3.15 billion in the 12 months to the end of February.
“Reflecting the increased uncertainty caused by the conflict in the Middle East, we are providing a wider range of guidance than we were previously planning,” the company said in its earnings statement. “Much will depend upon the duration of the conflict and in particular, the potential implications for UK households and the economy more broadly.”
Tesco chief executive Ken Murphy said the company is “committed to doing whatever we can to help keep down the cost of the weekly shop.” The group added that its profit after tax jumped nearly 10 percent to £1.79 billion in its 2025/26 financial year. Revenue grew 5.4 percent to £73.7 billion.
IMF chief Kristalina Georgieva on Wednesday warned of difficult times ahead for the global economy if war in the Middle East is unresolved and oil prices stay high. “We are concerned about risks for inflation moving into food prices should the delivery of fertilisers at a reasonable price (not be) restarted soon,” Georgieva told reporters during the International Monetary Fund and World Bank’s spring meetings in Washington.
Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said Tesco is “in a better position than most of the competition when it comes to weathering these headwinds. “Its enormous scale and strong relationships with suppliers are its key tools in keeping prices down for customers, giving them little reason to look elsewhere,” he noted following the earnings update. Tesco’s share price was up 2.5 percent in morning deals on London’s benchmark FTSE 100 index, which rose 0.2 percent overall.
© 2024 AFP
