Automation drive for Tesco as profits rise

Tesco is building a highly automated new fresh food distribution centre in Kent as it looks to step up its technological capabilities.

The grocery market leader posted its 2023/24 preliminary results on 10 April, with group sales rising 7.4 per cent to £61.5m. Adjusted operating profits went up 12.8 per cent to £2.8bn.

Among its updates, Tesco said it is pushing through a programme of investment in high-returning future growth and digital capability. That includes having started construction of a fresh food distribution centre in Aylesford, Kent, that will incorporate robotic automation technology.

The retailer is also developing AI solutions to drive productivity, competitiveness and value, including a new range optimisation tool that automates bespoke product selection based on store location and demographic.

Other investments include an enhanced transport scheduling system and new stock assembly processes to drive greater supply chain efficiency.

Driving value

On the store shelf, Tesco underlined its commitments to passing savings to customers, noting that over the year it implemented price cuts on over 4,000 products by an average of 12 per cent.

Clubcard Prices are also now available on 8,000 products a week, giving customers a potential saving of £360 a year off their grocery bill.

“Inflationary pressures have lessened substantially, however we are conscious that things are still difficult for many customers, so we have worked hard to reduce prices and have now been the cheapest full-line grocer for well over a year,” said chief executive Ken Murphy.

“We have continued to invest in helping customers where it matters most, cutting prices on more than 4,000 products and doubling down on our powerful combination of Aldi Price Match, Low Everyday Prices and Clubcard Prices. Customer perception of the quality of our products is growing ahead of the market and we continue to win customers from premium retailers, with sales of Tesco Finest now exceeding £2bn.

“We have strong momentum in our business, and are encouraged by signs of improving consumer sentiment. We’re excited about the opportunities ahead, with the right plans to keep winning with customers, as well as a great team to deliver them.”