Tesco says Middle East war creating uncertainty as Cork CEO reveals €3.6bn profits  

Chief executive Ken Murphy played down possibility of a hit to food availability due to war

Tesco chief executive Ken Murphy has warned that profits could dip over the current year as the group flagged increased uncertainty linked to the conflict in the Middle East. Picture: Ben Stevens/Parsons Media/via Reuters

The Corkman leading supermarket giant Tesco has warned that profits could dip over the current year as the group flagged increased uncertainty linked to the conflict in the Middle East.

Tesco chief executive Ken Murphy said the company was "committed to doing whatever we can to help keep down the cost of the weekly shop" amid growing fears over continuing war.  Tesco reported stronger-than-expected adjusted operating profits of £3.15bn (€3.62bn) for the year to February 28, up slightly from £3.13bn a year earlier. Sales in Ireland grew 4.6%, the company said. Tesco has more than 13,000 employees in its 190 Irish stores.

“We are committed to doing whatever we can to help keep down the cost of the weekly shop, and with the conflict in the Middle East creating further uncertainty for consumers and the economy more broadly, that commitment matters more than ever," said Mr Murphy.

“Over the last year, despite cost pressures from new regulation, we have increased our investments in keeping prices low, further improving quality and offering even better service."

Mr Murphy said the company had not seen any real changes in customer behaviour in response to the war in the Middle East, and he played down the possibility of a hit to food availability. "We are not flagging any issues in our supply chain at this point. So none of our growers, suppliers, manufacturers have flagged to us any supply risk, we're not seeing any availability issues," he said.

The retailer said it expects profits to be between £3bn and £3.3bn over the current financial year, telling shareholders it was “providing a wider range of guidance than we were previously planning” due to uncertainty caused by the Iran war.

Tesco said sales, excluding VAT and fuel, grew by 4.6% to £66.6bn (€76.5bn) for the past year. The group said on Thursday that it plans to make a further £500mn in cost savings in 2026/27, after surpassing its £535m savings target last year.

Tesco Ireland chief executive Geoff Byrne said he expects the Irish market to "remain competitive" as global events continue to create uncertainty and put pressure on household budgets. "Our focus is clear, prioritising continued customer value, providing the best quality Irish products, strong availability, and making it convenient for modern consumers to shop when and how they like. Last year, we invested significantly in store openings and upgrades, as well as in our online business, bringing Tesco to customers in nine new locations and introducing our rapid‑delivery service, Whoosh.”

Additional reporting by PA and Reuters