Tesco's pretax profit down 20% but sales surge

Tesco, Britain's biggest retailer, reported a 20% drop in full-year pretax profit on Wednesday (April 14), as the cost of adapting the business for the pandemic wiped out its "exceptionally strong" sales.

Lockdowns boosted demand though, as restaurants and cafes shut and shoppers stocked up to eat at home.

Many also had to work from home, adding to strong sales for Tesco, as well as its three major UK rivals, Sainsbury's, Asda and Morrissons.

But that rapid shift to serving people online cost more than $1.2 million in Britain alone, hitting the company's bottom line.

Supermarkets had to stump up for additional workers, staff sick-pay and in-store measures to deal with the pandemic.

Profit before tax came in at $1.1 million, down nearly 20% on the year before.

Chief Executive Ken Murphy said Tesco had shown strength and agility and doubled the size of its online business.

Tesco said that while some of the additional sales volumes would fall away as restrictions ease, it expected a strong recovery, and that most of the past year's extra costs would be a one-off.