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Tesco rakes in £1bn while hiking prices amid cost-of-living crisis

Mega-rich firm accused of ‘obscene profiteering’ while millions struggle to feed their families

TESCO is indulging in “obscene profiteering” during the worst cost-of-living crisis in decades, Unite the Union charged today after the supermarket giant reported a whopping £1 billion profit despite soaring food prices.

The mega-rich firm said it made the pre-tax windfall in the 12 months to the end of February as total sales rose by more than 7 per cent to £65.8bn.

The profit was less than half of the more than £2bn it pocketed a year earlier as the amount of product sold fell, but bosses admitted making up for the shortfall by charging more per item on average.

They declined to reveal how much they have jacked prices for hard-hit shoppers struggling to cope with crippling 18.2 per cent food inflation — the highest in 45 years. 

Unite general secretary Sharon Graham said: “Tesco’s profits are another example of excessive profiteering fired up by astonishing corporate greed.

“It’s this rampant profiteering which is driving inflation, and cranking up the cost-of-living crisis for workers and their families.

“How can it be that at a time when millions are struggling to feed their families Britain’s biggest supermarket is profiteering as never before.

“What sort of country have we become? Frankly, these results are obscene.”

The union leader also slammed the company for rewarding shareholders with “astonishing bonuses.”

Between 2021 and 2022, the firm paid out £704 million in dividends and in July last year, it launched “another big payday for shareholders” in a £1bn share buyback scheme, she said.

“This is the golden corporate gift that keeps on giving without end,” stressed Ms Graham, who accused Tory ministers of an “abject failure in leadership to reduce these staggeringly excessive profits.”

Sue Davies from consumer group Which? argued the firm’s latest bumper haul shows it could be doing more to help shoppers.

“Tesco is doing very well during the cost-of-living crisis while millions of its customers struggle to put food on the table,” she said. 

“It’s clear that all the major supermarkets could be working harder to make food more affordable for customers who need help.

“While we want to see British businesses do well, Tesco has an important role as the UK’s largest supermarket to lead the way on making affordable ranges of healthy, nutritious food more widely available, especially in those areas most in need.”

The company claimed to be using its mammoth purchasing power to negotiate more beneficial contracts with suppliers, allowing it to raise prices more slowly than competitors — an approach dubbed “inflate behind the market.”

A “trio of issues,” including lower sales volumes, investment in the business and steep cost rises, meant it had to increase prices, Tesco chief executive Ken Murphy suggested.

He said: “It’s been an incredibly tough year for many of our customers and we have been determined to do everything we can to help.

“Our results reflect our continued investment in delivering great value and quality for our customers, whilst at the same time looking after our colleagues.

“This is despite unprecedented levels of inflation in the prices we have paid our suppliers and the cost of running our own operations.”

Climate change-hit harvests across the continent and the ongoing war in Ukraine have disrupted supply chains for many staple foods, including grain and cooking oil. 

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