Surprise that Tesco is not immune from inflation is itself surprising. The supermarket chain is playing the long game and attempting to avoid past missteps.
Rising costs and weaker consumer spending could cause it to miss the £2.6 billion adjusted retail operating profit this year. Management has guided towards profits for that core business coming in anywhere between £2.4 billion and £2.6 billion, which even at the top end would be a slight reduction on last year.
Tesco faces pressure on both sides of the profit margin equation. Operating expenses are unsurprisingly rising, with wage and energy cost inflation increasing by roughly the same magnitude. A decision earlier this year to increase pay for shop staff and delivery drivers is expected to cost the grocer
