Tesco Stores, a major food retail chain in the Czech Republic and part of the British group Tesco PLC, experienced an 85.6% decrease in net profit for the financial year ending on February 28, 2023, with net profit totaling 113 million Czech koruna. Despite this drop in profitability, the company’s revenues increased by approximately 3.6 billion Czech koruna to reach 45.7 billion Czech koruna.

In the same financial year, Žabka stores, also under the Tesco PLC umbrella, reduced their losses in the Czech Republic from approximately 47.1 million Czech koruna to 13 million Czech koruna. The franchise network’s revenues amounted to nearly 1.6 billion Czech koruna, marking an increase of 179.6 million Czech koruna.

Tesco Stores has consistently highlighted its presence in the Czech Republic, operating more than 180 stores and running 17 petrol stations. On the other hand, the Žabka network boasts over 120 stores.

The financial challenges faced in the past year were attributed to the Russian invasion of Ukraine and its subsequent consequences, including inflationary pressures. Tesco acknowledged the direct impact of these factors on their customers’ financial situations and increased operational costs, particularly within the supply chain. As a result, the company stated that it continuously evaluates these inflationary and economic risk factors, implementing measures to mitigate them.

During the 2022/2023 financial year, Tesco Stores employed 7,010 people in the Czech Republic, a decrease of 266 employees compared to the previous year. The company’s spending on personnel costs, encompassing salaries, social security, health insurance, and employee benefits, amounted to around 4.67 billion Czech koruna. This represented an increase of roughly 69 million Czech koruna compared to the 2021/2022 financial year.

Tesco PLC, the parent group, reported revenues of approximately 57.7 billion pounds (approximately 1.6 trillion Czech koruna) in the fiscal year 2022/2023.

In the same retail landscape, Lidl, a part of the German Schwarz Group, holds the position of the largest food retailer in the Czech Republic. In the business year spanning from March 1, 2022, to February 28, 2023, Lidl reported a net profit decrease of around six percent to 5.18 billion Czech koruna. However, the company’s revenues witnessed a ten percent increase, reaching approximately 84.36 billion Czech koruna. Lidl operates 317 stores across the country, maintaining a strong presence in the Czech retail market.

Article by Prague Forum