Review · Manila Wire
Key events 10m ago Tesco lifts profit forecast and says consumer confidence is resilient 15m ago Introduction: Oil prices climb amid supply fears and shipping attacks; prospect of rate rise weighs on UK housing market The solid Tesco results show why its future looks less like a supermarket chain and more like a consumer data platform , says Nick Sherrard , managing director of the consultancy Label Sessions. He explains: double quotation mark Tesco has turned in another solid set of results, showing it can keep growing even when the wider economy feels uncertain. Sales, profits, and cash generation are all moving in the right direction, and record customer satisfaction suggests shoppers are responding to its mix of low prices, better quality, and easier ways to shop.
Bigger picture, the company’s growth has quietly become a technology story. Clubcard is one of the richest customer datasets in the UK and its retail media business is now using that to sell very effectively to suppliers. On the consumer side, more personalised offers, wider rewards, and tools like the new AI meal planner seem to be landing well with shoppers, helping Tesco deepen relationships and keep customers choosing it over rivals.
With solid online growth, new delivery partnerships, and continued investment in new products, Tesco is in a strong position. But its future looks less like a supermarket chain and more like a consumer data platform. A lot of other retailers will be looking to Tesco’s success as a case study in how technology can transform their own fortunes in a highly competitive UK grocery sector.
Tesco lifts profit forecast and says consumer confidence is resilient Sarah Butler Tesco has raised its annual profit forecast and said consumer confidence has remained relatively resilient this year despite ongoing geopolitical tensions “creating uncertainty”. The UK’s biggest grocer said sales rose just 2% to £33.8bn in the first six months of its financial year but underlying profit was up 6.5% to £1.8bn. Ken Murphy, the chief executive of Tesco, said growth had been helped by strong online sales, which were up 8%, and a 9% jump in revenues from its premium own-label Finest range.
A Tesco in Somerset on 19 August. The British retailer, founded in 1919, is one of the largest in the world and is the market leader of groceries in the UK. Photograph: Anna Barclay/Getty Images The company added: double quotation mark While consumer confidence has remained relatively resilient in the first half of the year, ongoing geopolitical tensions continue to create uncertainty and we remain focused on helping customers get the best possible value from their weekly shop.
The company said it now expects to make underlying annual profits of between £3.15bn and £3.3bn. That represents an upgrade from its previous expectation of at least £3bn in profits but the bottom end of the range would still mark a fall from a year earlier. Sales at established UK Tesco stores were up 1.5% as food sales motored, but the group’s Booker wholesale arm continued to have difficulties, with sales falling 2.6%.
The supermarket flagged that it was increasingly using artificial intelligence to help out across the business, including a meal planning assistant which was tested from April with 280,000 staff before being launched for customers in September. Introduction: Oil prices climb amid supply fears and shipping attacks; prospect of rate rise weighs on UK housing market Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy. Oil prices have risen towards $103 a barrel on worries about crude supplies from the Middle East amid growing attacks on shipping in the Gulf and the strait of Hormuz, while the US has reduced its output as a hurricane threatened offshore production.
Brent crude, the global benchmark, advanced $2.62 a barrel to $102.8 a barrel, up 2.6%. Attacks on tankers sailing through the strait were at a weekly high last week since the US and Israel unleashed the Iran war on 28 February, Reuters reported, citing maritime security sources. There were at least 12 attacks on oil, liquefied natural gas and liquefied petroleum gas tankers around the strait in the week to 5 October.
At the same time, Gulf producers have stepped up oil exports. Asian shares fell again amid the strain in government bond markets and reports that some big tech companies are seeking to raise billions of dollars in debt. Japan’s Nikkei lost 1.4% while the South Korean Kospi tumbled 2.6%.
The prospect of higher interest rates is weighing on Britain’s housing market, the Royal Institution of Chartered Surveyors said this morning. RICS said its house price balance fell to -32 last month from a five-month high of -28 in August, a bigger decline than expected, while the number of new properties coming onto the market rose for the first time since the middle of last year. The balance deducts those who say prices fell from surveyors and estate agents who reported rising prices.
RICS head of market research Tarrant Parsons said: double quotation mark A renewed rise in interest rate expectations has created a fresh headwind for the housing market, with buyers becoming a little more cautious and sales activity losing some momentum. Surveyors and estate agents expect property prices to fall further over the next three months, but to be stable over the coming year. London had the most negative price balance while Scotland and Northern Ireland reported rising prices.
Financial markets expect the Bank of England to raise interest rates from 3.75% to 4% in November, followed by three more quarter-point hikes next year. Unlike the US Federal Reserve, European Central Bank and Bank of Japan, the UK’s central bank has kept borrowing costs unchanged so far, despite a pick-up in inflation since the Iran war started. New buyer enquiries weakened for the first time since March, though it remains well above the low hit just after the outbreak of the US-Iran war.
The survey also points to rising rents. Growing demand from tenants and fewer properties from landlords has pushed the net balance for rents above its average in the first half of the year, though it is lower than in August. The report comes after mortgage lender Lloyds reported unchanged house prices in September while Nationwide building society reported a small drop.
Andrew Bailey , the Bank of England governor, chief economist Huw Pill and two other UK policymakers, Clare Lombardelli and Megan Greene are giving speeches today. The Agenda 9.30am BST: Bank of England credit conditions survey 10.15am BST: Megan Greene speech in Cape Town 1.15pm BST: Andrew Bailey speaks at the Istanbul Economic Forum in Istanbul
Source: The Guardian
