Greater collaboration with suppliers had allowed the retailer to maintain availability and adapt to exceptional shift in demand due to COVID-19, it stated.
In the report, Tesco said: “In response to the significant demand peak early in the year, we worked with our supplier partners to simplify our offer, prioritising availability in essential products and categories.
“We reduced promotional participation from 36% to 21% through the year as we focused on every day great value for customers.”
Immediate payments for small suppliers
To support its suppliers, Tesco moved to immediate payment of invoices for all small suppliers during the pandemic – a move that was extended until the end February 2022 at the start of this year.
The retailer also worked with its partners throughout the supply chain to remove 200,000 tonnes of cumulative food waste from combined operations across and remove 1bn pieces of plastic from its UK business.
Tesco also supported catering customers’ move to a delivery model through its wholesale arm, Booker in order to meet changing demand.
Tesco posted sales growth of 7.1% to £53.4bn compared to the previous year, with sales in the UK and the Republic of Ireland accounting for £48.bn of those sales (up 8.8%).
However, operating profit before exceptional items and amortisation was down 29.1% to £1.8bn. The company attributed this mainly due to the disruption caused by the ongoing pandemic, with significant costs in safeguarding employees and the procurement of safety equipment – slightly offset by higher sales.