Opening Quote: Tesco beats ’em and joins ’em

Tesco's operating margin has been climbing from 2.3 per cent in 2016-17 towards a target of 3.5-4.0 per cent in 2019-20. Aldi's operating margin has only just edged up to 2.6 per cent from 2.4 per cent last year - the first increase since 2013. As a result, Tesco's group operating profit before exceptional items and amortisation of acquired intangibles was up by almost a quarter to £933m. However, statutory pre-tax profit was up only 2 per cent, after £57m of costs for the closure of Tesco Direct, and Tesco Bank's £16m regulatory fine. UK like-for-like sales growth of 2.3 per cent in the first half; group like-for-like sales up 2.2 per cent. Two years ago, Mr Lewis pledged to restore Tesco's group margin to between 3.5 per cent and 4 per cent by the 2019-20 financial year, and he is well on the way to doing so, possibly ahead of schedule.

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