British supermarket chain Tesco has reported that its statutory revenue for the first half (H1) of fiscal 2022/23 (FY22/23) grew by 6.7% to £32.5bn ($36.4bn).

The company’s sales, excluding value-added tax and fuel, rose by 3.5% on a constant-rate basis to £28.17bn in the six-month period.

Despite this, Tesco’s operating profit dropped by 43.6% to £736m compared with £1.30bn in the corresponding period of the previous year.

The company’s adjusted operating profit for H1 declined by 9.8% at a constant rate to £1.31bn.

Tesco recorded a profit before tax of £413m for H1 2022/23, down by 63.9% from £1.14bn a year earlier.

The company’s diluted earnings per share (EPS) also suffered a 67.9% decrease to £0.03 from £0.11 in the prior-year period.

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By GlobalData

Tesco chief executive Ken Murphy said: “We know our customers are facing a tough time and watching every penny to make ends meet.

“That’s why we’re working relentlessly to keep the cost of the weekly shop as affordable as possible, with our powerful combination of Aldi Price Match, Low Everyday Prices and Clubcard Prices, together covering more than 8,000 products, week in, week out. 

“As we look to the second half, cost inflation remains significant, and it is too early to predict how customers will adapt to ongoing changes in the market.

“Despite these uncertainties, our priorities are clear. We have the right long-term strategy, and we will continue to balance the needs of all of our stakeholders.

“Most importantly, we will stay focused on delivering value for our customers and supporting them in every way we can.”

Despite cost inflation challenges in the market, Tesco said that it has kept its profit guidance within its previous range.

For the full year, the company expects a retail-adjusted operating profit of between £2.4bn and £2.5bn.