Tesco’s festive profits soar – so why does that not mean cheaper food for us?

Tesco just released its third-quarter and festive trading statement, and surprise surprise – the supermarket giant is making a killing. Of course, massive profits aren’t that hard to come by when you price-gouge at every opportunity.

In fact, over the last four years, Tesco’s operating profits have shot up by a massive 72%. Meanwhile, food prices in the UK have also increased by a staggering 40%.

We wonder what the relationship between the two figures could possibly be?

Thanks and peanuts to Tesco

In a company press release accompanying the figures, Tesco chief executive Ken Murphy boasted:

I am delighted with the strong Christmas we delivered for our customers. Our investments in value, quality and service drove further gains in customer satisfaction and strong growth in fresh food, contributing to our highest UK market share in over a decade…

I would like to thank all our colleagues for the exceptional service they have given to our customers over this important period; this has been a real team effort. We are well positioned for the year ahead and remain committed to ensuring customers get the best possible value by shopping at Tesco.

Well that’s just lovely, isn’t it?

It’s funny that Murphy should mention his Tesco ‘colleagues’, actually. You know who else mentioned Tesco staff in in a press release today? Unite the union general secretary Sharon Graham.

Responding to Tesco’s latest glowing trading figures, Graham said:

While workers and their families, including Tesco’s own workers, are still struggling with rampant food inflation, Tesco is paying out millions in shareholder dividends and their executive pay has soared. This sort of rampant profiteering is simply a disgrace, and it must be stopped.

Isn’t it funny how often massive profits turn into shareholder dividends and gold-plated salaries for board members – they never seem to translate into higher wages for the staff whose work actually generates those profits.

Out-performing predictions

Back in October of last year, the Canary reported on Tesco’s profiteering whilst Ken Murphy begged the chancellor not to raise corporate taxes. At the time, we wrote that the retail giant:

posted an adjusted operating profit increase of 10.6% for 2024-2025 alone. This was far ahead of the 5.1% increase in the price of food in all retailers across the country in the same period, and even further above the 3.8% level of inflation overall.

Then, Tesco shares reached a 12-year high yesterday, 2 October. Its half-year sales (for the six months to August 23) went up 5.1%, reaching £33bn. The price of its individual shares went up by 5.3%. The retail giant now expects a profit of between £2.9 and £3.1bn for 2025 overall, up from a previous forecast of £2.7-£3bn.

Now, following the third quarter and Christmas, that forecast adjusted operating profit has climbed even higher, reaching the upper end of the £2.9bn to £3.1bn range.

So, Tesco’s profits are doing – quite literally – as well as the supermarket could have dared to hope. With all of that excess cash, maybe Murphy and the board could spare some for their workers?

Dream on.

featured image via the Canary