Pound's Brexit Weakness Weighs on Tesco as It Caps Prices
- Profit beats expectations but domestic sales fall short
- Retailer to pay first dividend in 3 years in fitful recovery
A Tesco logo sits on the back of a receipt at the Tesco Basildon Pitsea Extra supermarket, operated by Tesco Plc, in Basildon, U.K., on Tuesday, Dec. 1, 2015. Many European food retailers are coming to terms with persistently low inflation as well as consumers who remain frugal yet purchase food more frequently.
Photographer: Chris Ratcliffe/BloombergThis article is for subscribers only.
Even Tesco Plc’s vast bulk can’t shield it from the effects of Brexit.
Sales growth at the U.K.’s biggest retailer slowed in the latest quarter as the company held the line on prices despite an inflationary squeeze from the weak pound, raising concerns about the strength of Tesco’s recovery. Profits are being bolstered by international operations that were long seen as a distraction.