Leaner times ahead for supermarket giant Tesco?

Supermarkets have done well during the pandemic. 

But after they all grudgingly gave back their business rates relief – with Tesco leading the way – does that still hold true? 

Investors in Tesco will find out this month, when it reveals its full-year results for the year to February. It will be the first major announcement since Ken Murphy, the chief executive, took over from Dave Lewis last October. 

Already Murphy seems to be aping ‘Drastic Dave’, a nickname earned because of his fearsome reputation for cost-cutting. 

Tesco, which has almost 3,500 stores, is overhauling the way shops are run, putting more than 2,000 managerial jobs under review. 

The plan points to leaner times ahead. But the latest data from Kantar indicate that Tesco has been doing well – its sales were up 8.5 per cent in the 12 weeks to March 21, better than Sainsbury’s and Asda. 

And as non-essential stores shut, larger Tesco outlets capitalised on higher sales of clothes and other non-grocery items. 

But there may be turbulence ahead. Analysts at JP Morgan this week warned of the increasing threat posed by discounters such as Lidl and Aldi. 

After crunching data on store locations and their catchment areas, they felt Tesco faced a bigger risk than others of losing custom to cheaper rivals. 

This will be on Murphy’s radar. Investors will be keen for more guidance in the full-year results on April 14 on where he sees Tesco going, and how he plans to get there.