Tesco, the UK's largest grocer, has raised its annual profit forecast, citing relatively resilient consumer confidence despite geopolitical tensions. The company reported a 6.5% increase in underlying profit to £1.8bn for the first six months of its financial year, with sales rising 2% to £33.8bn.
Growth was supported by an 8% increase in online sales and a 9% jump in revenues from its premium own-label Finest range, according to chief executive Ken Murphy. Tesco now anticipates underlying annual profits to be between £3.15bn and £3.3bn, an upgrade from its previous expectation of at least £3bn.
Earlier this year, Tesco had warned of potential profit declines due to uncertainty from the conflict in Iran. However, some economic indicators, including upgraded UK growth estimates for the second quarter, suggest the war has not yet had a significant impact. The supermarket also highlighted its increasing use of artificial intelligence to improve efficiency, including a meal planning assistant launched for customers in September and AI-driven cost savings in stock replenishment and energy efficiency.