SUPERMARKET giant Tesco has reported its first increase in annual UK sales for seven years as its recovery under boss Dave Lewis continued to gather pace.

The grocery giant saw like-for-like sales rise 0.9 per cent in the year to February 25, its first annual growth since 2010. Similarly, food sales in the UK were up 1.3 per cent. It said operating profits rose 30 per cent to £1.28 billion, while group sales increased 3.7 per cent to £55.9bn.

“We are ahead of where we expected to be at this stage, having made good progress on all six of the strategic drivers we shared in October,” said Lewis. “We are confident that we can build on this strong performance in the year ahead, making further progress towards our medium-term ambitions.”

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Lewis also used the results to make the case for Tesco’s proposed £3.7bn merger with Booker, reiterating his view that it will add shareholder value, after a number of investors spoke out against the deal in recent weeks.

Both Schroders and Artisan, which own nine per cent of Tesco, have said it should be called off, insisting the price being paid is too high and that a merger will distract from the core business. The tie-up is also expected to face scrutiny from the Competition and Markets Authority, which could force Tesco to offload stores if it deems the deal harms competition.

On a statutory basis, Tesco’s pre-tax profits fell to £145m from £202m after an exceptional £235m charge linked to payments to UK authorities over its 2014 accounting scandal.