Preliminary results 2021/22



 Performance highlights1,2: 2021/22 2020/213 Change at
actual rate
Change at
constant rate
   Group sales (exc. VAT, exc. fuel)4 £54,768m £53,445m 2.5% 3.0%
   Adjusted operating profit5 £2,825m £1,788m 58.0% 58.9%
     -     Retail £2,649m £1,963m 34.9% 35.8%
     -     Tesco Bank £176m £(175)m n/m n/m
    Retail free cash flow6 £2,277m £1,340m 69.9%  
    Net debt2,6 £(10.5)bn £(12.0)bn down 12.0%  
    Adjusted diluted EPS5.7 21.86p 11.58p 88.8%  
    Dividend per share 10.90p 9.15p 19.1%  
Statutory measures:
    Revenue (exc. VAT, inc. fuel) £61.3bn £57.9bn 6.0%  
    Operating profit £2,560m £1,547m 65.5%  
    Profit before tax £2,033m £636m 219.7%  
    Retail cash generated from
    operating activities
£3,614m £321m 1,025.9%  
    Diluted EPS 19.64p 5.58p 252.0%  

Strong sales and profit performance leading to retail free cash flow ahead of expectations:

  • Strong sales throughout the year; Retail 1-yr LFL8 sales growth includes UK market outperformance and sharp recovery in Booker; 2-yr LFL reflects strong performance throughout the pandemic across all businesses:
  UK ROI Booker UK&ROI C.Europe Retail
   1-yr LFL sales 0.4% (2.9)% 15.3% 2.2% 2.9% 2.3%
   2-yr LFL sales 8.2% 10.6% 11.9% 8.8% 2.5% 8.3%
  • Total retail adjusted operating profit5 £2,649m, +35.8% at constant rates
    • UK & ROI adjusted operating profit £2,481m, +35.4% due to higher sales and lower COVID-19 costs
    • C. Europe adjusted operating profit £168m, +41.1% due to lower COVID-19 costs & higher YoY mall income
  • Bank adjusted operating profit £176m, returning to profit following last year’s increase in potential bad debt provision
  • Statutory revenue £61.3bn, +6.0% and statutory operating profit £2,560m, +65.5%; driven by strong sales, reduced COVID-19 costs and a return to profitability in Tesco Bank
  • Retail free cashflow6 £2,277m, +69.9% from higher profit, lower pension contribution9 & higher working capital inflow
  • Net debt2,6 reduced by +£1.4bn since last year driven by strong cash flow; net debt ratio down to 2.5x
  • Adjusted diluted EPS5,7 21.86p, +88.8%; statutory diluted EPS 19.64p, +252.0%; reflecting higher profits
  • Proposed final dividend of 7.70pps to take full year dividend to 10.90pps – up +19.1% YoY

Strengthening our customer proposition:

  • Market share gains in UK, ROI & C.Europe; including +30bps to 27.7% in UK, outperforming on value and volume
  • Highest Brand NPS to date; Brand index further improved +9bps YoY (+63bps vs competitor average)
  • Aldi Price Match extended to c.650 lines, all promotions now on Clubcard Prices, re-launched 1,600 Low Everyday Prices
  • Value perception: outperformed market by 91bps; Quality perception: +11bps vs market decline of (32)bps
  • UK online share +142bps to 34.8%; 9.0m digital Clubcard app users; ‘Tesco Whoosh’ now in over 200 stores

Creating long-term, sustainable value for all Tesco stakeholders:

  • Substantial new pay deals agreed for hourly paid colleagues; additional thank you payment announced
  • Group supplier viewpoint survey reached highest ever score of 86.4% (+1.4% pts YoY)
  • Donated 53m meals through food redistribution programmes and 3m meals through ‘Buy One to Help a Child’ campaign
  • Ambitious targets for net zero (2035: own operations, 2050: scope 3); first UK-wide soft plastic recycling network
  • Multi-year performance & capital allocation frameworks set out, underpinned by four strategic priorities
  • £300m capital returned to date through share buyback programme; committing to a further £750m by April 2023

Detail on financial footnotes can be found on page 4.  Other data sources are referenced on page 15. 

Ken Murphy, Chief Executive:

“Before reflecting on business performance, I want to say that the entire Tesco family is thinking of all the people affected by the war in Ukraine.  The impact is particularly close to home for our colleagues in Central Europe, who are supporting with logistics and donations of food and clothing, as well as helping to transport donations to the Red Cross at the Ukrainian border.  Combining our own donations and matching those of customers, together we have raised almost £4m to support the vital work of the Red Cross, as well as more than £500k for humanitarian organisations in Central Europe.  We continue to offer support to those in Ukraine however we can.

Over the last year, we delivered a strong performance across the Group, growing share in every part of our business.  We did this by staying focused on our customers and doing the right thing for our colleagues, our supplier partners and the communities we serve.  I want to thank all of our colleagues who did a brilliant job navigating the ongoing pandemic, dealing with the supply chain challenges in the industry and tackling the onset of increasing inflation.

In October, we shared the four strategic priorities that will help us to stay competitive, accelerate our growth and ensure that we can sustainably generate strong levels of retail free cash flow.  We have already made good progress: our value perception is the strongest it has been for many years; we are building deeper relationships with more customers through the digitisation of Clubcard; and we are serving more customers wherever, whenever and however they want through more convenience stores, more than 100 new Click & Collect sites and the launch of Tesco Whoosh.

Tesco is at its best when it puts customers first – it’s what we did during the pandemic and it is what we will continue to do now.   Clearly, the external environment has become more challenging in recent months.  Against a tough backdrop for our customers and with household budgets under pressure, we are laser-focused on keeping the cost of the weekly shop in check – working in close partnership with our suppliers, as well as doing everything we can to reduce our own costs. Through our powerful combination of Aldi Price Match, Low Everyday Prices and Clubcard Prices, we are making more products more affordable, in more places than anyone else.

We are confident that taking this approach will enable us to deliver on the multi-year performance framework we shared in October, driving sustainable growth and generating strong retail free cash flow.  This confidence, and our strong performance to date is reflected in the increased pace and scale of our capital return programme, with a commitment to repurchase shares worth £750m over the next twelve months.”


We are running the business to generate sustainable value for all stakeholders and will continue to champion great value for customers at a time when they are facing increasing pressure on household budgets.

Given the significant uncertainties in the external environment, we believe it is appropriate to provide profit guidance in the form of a wider than usual range.  Our guidance for the 2022/23 financial year is therefore for retail adjusted operating profit of between £2.4bn and £2.6bn.  Three main factors are likely to influence our actual performance:

  • the extent of further normalisation in customer behaviour as we come out of the pandemic
  • the level of cost inflation that we experience and our ability to partially offset it through accelerating Save to Invest
  • the investment required to maintain the strength of our price position relative to the market

We expect Bank adjusted operating profit of c.£120m to £160m.

Our focus on cash flow remains unchanged and we expect another strong retail free cash flow performance within our £1.4bn to £1.8bn range.


To date, we have purchased £300m worth of Tesco shares as part of our ongoing share buyback programme.

Reflecting our strong retail free cash flow to date and confidence in our ability to sustainably generate retail free cash flow within our guidance range of £1.4bn to £1.8bn going forwards, we are pleased to confirm a commitment to buy back a total of £750m worth of shares over the next twelve months.  This means that by April 2023 we will have bought back a cumulative £1.05bn worth of shares since the start of the programme.

Going forward, we plan to announce any new forward commitments regarding our capital return programme as part of our preliminary results each April.


Tesco has a uniquely strong position in terms of reach, capability and market share, built up through decades of focusing on meeting our customers’ needs.  We are hugely proud of the capability and commitment of our team of 345,000 colleagues, serving millions of customers across the Group.  We have market-leading positions in every channel and format in our core UK retail and wholesale markets, and through Clubcard, dunnhumby and over 40 million transactions every week, we have the insight to be able to understand and anticipate customers’ changing needs.  We have the broadest, most compelling product range and strong relationships with our supplier partners, together with efficient, well-invested supply chain, distribution and fulfilment infrastructure.

In October, we refreshed our capital allocation framework and shared a new multi-year performance framework to guide our actions and track our progress over the coming years.  We shared four strategic priorities which will help drive top-line growth, grow our absolute profits and in doing so, generate between £1.4bn and £1.8bn retail free cash flow per year.  We are confident that this will enable us to maintain a strong and efficient balance sheet, invest for growth and deliver improved returns for our shareholders.   

We have already made good progress:

1) Magnetic value for customers - Re-defining value to become the customer’s favourite
  • Strongest UK price position in six years with shelf price index improved by +70bps YoY, achieved through:
    • Aldi Price Match increased to c.650 lines; Aldi Price Match products feature in 99% of large baskets
    • Re-launched Low Everyday Prices on 1,600 lines, with a particular emphasis on household and health & beauty
    • 100% of promotions now on Clubcard Prices, including our iconic £3 meal deal
  • Value perception outperformed market by 91bps; Quality perception +11bps vs market decline of (32)bps
  • Brand index further improved +9bps (vs competitor decline of (54)bps) on top of an exceptionally strong performance last year; 2-yr Brand index +413bps vs competitor average +132bps
  • Continuing to offer healthier choices through reformulation, with 7.7bn more calories removed
  • Removed 1.6bn pieces of plastic to date; UK’s first nationwide soft plastic recycling network rolled out from March 2021
  • Launched first electric HGVs in UK, with pilot in Hungary & Czech Republic; EV charging points now in 500 UK stores
2) I love my Tesco Clubcard – Creating a competitive advantage through our powerful digital capability
  • Continuing to drive Clubcard penetration +390bps YoY: Clubcard Prices launched in Tesco Express stores (May), Tesco Mobile (September) and Tesco Bank (October); also rolled out in ROI and launched Clubcard events in Central Europe
  • Number of customers accessing Clubcard via app now at 9.0m, with more than half of customers now receiving e-statements; Clubcard households reached over 20m
  • In-app personalised digital summary of customers’ experience and value with Tesco trialled with one million customers
  • dunnhumby leveraging insights from >800m customers with team of >500 data scientists; new CEO started Jan 2022
3) Easily the most convenient - Serving customers wherever, whenever and however they want to be served
  • Online sales remain significantly ahead of pre-COVID levels; market share +142bps to 34.8%; orders held at c.1.2m/wk
  • Four UFCs with pick rates around four times higher than store-based picking; added 102 new Click & Collect sites
  • ‘Tesco Whoosh’ superfast delivery service now available from >200 stores, rolling out to 600 stores this year
  • Simplified our offering, transitioned 89 Metro’s to Express; opened 40 Express stores and 283 Booker retail partners
  • Announced intention in November to acquire ten Joyce’s Supermarkets in Republic of Ireland, subject to CCPC approval
4) Save to invest – Significant opportunities to simplify, become more productive and reduce costs
  • New three-year savings plan underway, with target of c.£1bn through four streams – goods & services not for resale (GSNFR), property, store and distribution operations, and central overheads
  • Announced removal of counters in 317 stores in February, repurposing space to better reflect customers’ needs
  • Announced the closure of Jack’s format; six stores converted to superstores & seven due to close in FY22/23
  • Simpler supplier arrangements and improved procurement processes underway for goods & services not for resale



  1. The Group has defined and outlined the purpose of its alternative performance measures, including its performance highlights, in the Glossary starting on page 58. During the year, the operating profit and EPS APMs were renamed. Profit has changed from ‘Group operating profit before exceptional items and amortisation of acquired intangibles’ to ‘Adjusted operating profit’.  EPS has changed from ‘Diluted EPS before exceptional and other items’ to ‘Adjusted diluted EPS’.  The definitions are unchanged.  The Retail free cash flow APM was amended in order to provide a more consistent and predictable view of free cash flow generated by the Group’s retail operation.  ‘Exceptional items and amortisation of acquired intangibles’ within operating profit, along with net pension finance costs, fair value remeasurements of financial instruments, and the tax impact of such items (below operating profit), are now called ‘Adjusting items’.  The policy for determining adjusting items, and the items adjusted for, are unchanged from the prior year and hence there is no impact on previously reported APMs.            

  2. All measures apart from Net debt are shown on a continuing operations basis unless otherwise stated. Further details on discontinued operations can be found in Note 6, starting on page 34.

  3. The Group has changed its accounting policy for property buybacks in light of an evolution of accepted practice in relation to the application of IFRS 16 ‘Leases’ to such transactions. Comparatives have been restated for this change in accounting policy (see Note 1 on page 23 for further details).

  4. Group sales exclude VAT and fuel. Sales change shown on a comparable days basis for Central Europe.

  5. Adjusted operating profit and Adjusted diluted EPS exclude Adjusting items as noted in footnote 1.

  6. Net debt and retail free cash flow exclude Tesco Bank.

  7. The share base used in Adjusted diluted EPS in the prior year is adjusted to capture the full impact of the share consolidation which followed the sale of our businesses in Thailand and Malaysia, as if it took place at the start of the 2020/21 financial year. As such, Adjusted diluted EPS (adjusted for share consolidation) is presented on a basis other than in accordance with IAS 33.  Please see page 61 for a reconciliation to Adjusted diluted EPS.

  8. Like-for-like is a measure of growth in Group online sales and sales from stores that have been open for at least a year (at constant exchange rates, excluding VAT and fuel).

  9. UK pension contributions were eliminated following the £2.5bn one-off contribution made to the scheme in the prior year from the proceeds from the sale of our businesses in Thailand and Malaysia.

  10. Capex excludes additions arising from business combinations and buybacks of properties (typically stores), as well as additions relating to decommissioning provisions and similar items.


Download the full statement here



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