Tesco sees AI and automation technology investment pay off as UK grocery giant's first half sales rise

Tesco's first half sales were up 5.1% to £33.1 billion. Underlying operating profit increased 1.6% to £1.7 billion. And full year guidance was raised from £2.7-£3 billion to £2.9-£3.1 billion.

In releasing the results this morning, the UK grocery giant flagged up the opening of a new semi-automated fresh food distribution centre in Aylesford. It also inked an agreement to develop a new DC at DP World London Gateway, which it expects to open in 2029.

There has also been continued development of AI capability across the business, including improvements to in-house tools which find the most efficient journey for every Tesco lorry and delivery van, removing around 100,000 miles per week.

Whoosh rapid delivery service sales, meanwhile, were up +59%, with further growth in active customers and basket sizes, and the offering now covering over 70% of UK households. Whoosh recently launched in ROI.

Over 13 million customers are receiving more timely and relevant offers, product recommendations and recipe ideas, supported by a new partnership with Adobe

Targeted digital coupons were offered to ten million customers amid a continuing trial of Your Clubcard Prices. There was growth in advertisers using the Tesco Media and Insight Platform; particularly significant growth for smaller advertisers who are building their brands through tailored product offerings. And over 1,400 screens were added to stores with a One Stop trial underway.

Every little helps

Derren Nathan, Head of Equity Research, Hargreaves Lansdown, says: “Tesco’s stores and vans have delivered a little extra in the first half. Underlying operating profit of £1.7 billion came in a shade ahead of market forecasts, but intensified competition and cost pressures meant that growth in profits lagged sales by some margin. Still, management were confident enough to raise the mid-point of full-year profit guidance by 5% to £3 billion. It’s not a spectacular change, but every little helps."

"Tesco’s broad offer to customers at all price-points is helping it to drive sustained market share gains, something it’s done in practically every month of the last two years. Competition remains fierce and household budgets are under pressure, but it is well placed to continue investing in value and quality. However, the valuation feels broadly up with events, so today’s upgrade is unlikely to spark too much excitement on the stock market.”

2025 RTIH INNOVATION AWARDS

Grocery retail will be a key focus area at the 2025 RTIH Innovation Awards.

The awards. which are now closed for entries with our finalists and shortlists being announced last week, celebrate global tech innovation in a fast moving omnichannel world.

Our 2024 hall of fame entrants were revealed during an event which took place at RIBA’s 66 Portland Place HQ in Central London on 21st November, and consisted of a drinks reception, three course meal, and awards ceremony presided over by comedian Lucy Porter

In his welcome speech, Scott Thompson, Founder and Editor, RTIH, said: “The event is now into its sixth year and what a journey it has been. The awards started life as an online only affair during the Covid outbreak, before launching as a small scale in real life event and growing year on year to the point where we’re now selling out this fine, historic venue.”

He added: “Congratulations to all of our finalists. Many submissions did not make it through to the final stage, and getting to this point is no mean feat. Checkout-free stores, automated supply chains, immersive experiences, on-demand delivery, next generation loyalty offerings, inclusive retail, green technology. We’ve got all the cool stuff covered this evening.”

“But just importantly we’ve got lots of great examples of companies taking innovative tech and making it usable in everyday operations - resulting in more efficiency and profitability in all areas.”

Congratulations to our 2024 winners, and a big thank you to our sponsors, judging panel, the legend that is Lucy Porter, and all those who attended November's gathering. 

For further information on the 2025 RTIH Innovation Awards, please fill in the below form and we will get back to you asap.