Tesco Plans Cost Cuts Amid Price War, Tax Hikes

Tesco, the UK's largest supermarket chain, has announced plans to cut an additional £500 million in costs to mitigate the impact of increased competition and higher taxes, including a rise in National Insurance contributions. The company expects its annual operating profit to fall between £2.7 billion and £3 billion, down from £3.1 billion the previous year, due to a challenging market characterized by a price war among major supermarkets. Asda's recent aggressive price cuts have contributed to Tesco's share price dropping by 11% in the last month. Tesco's CEO, Ken Murphy, emphasized the necessity for the company to maintain flexibility and competitiveness amidst these conditions. Despite cost-cutting measures, Tesco has not ruled out potential job cuts but aims to continue growing the business and offering more opportunities. Analysts had previously forecasted higher profits, but intensified competition and increased operational costs have led to a downward revision of expectations.