Tesco has announced it will eliminate more than 300 head office positions while increasing wages for shop employees.

This was the third time in 13 months that it had done so as a warning that cost inflation would hurt profits.

The plans include consultation on 325 job cuts in regional management teams and head office that started in the last two weeks.

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A near-64 percent decline in half-year profits was revealed, along with an increase in automated tills and a decrease in the number of suppliers.

Tesco expressed the hope that those losing their jobs could fill 500 other positions at the corporate level.

The largest retailer in the UK wants to save £500 million this year.

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The company announced it was now on track for full-year profits of between £2.4 billion and £2.5 billion, shaving £100 million off the top of its forecast.

According to Tesco, consumers would purchase fewer smaller gifts and costs for groceries during the busiest holiday shopping season would continue to rise due to high energy prices.

The supermarket giant has confirmed the

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The supermarket giant has confirmed the basic hourly rate of pay at its stores will rise by 20p to £10.30 (or £10.98 in London) as of November 13; this raises the overall pay increase for this year to eight percent.

Employees in the group’s Booker wholesale division will see their hourly pay increase by 25p to a minimum of £10.

Tesco is also moving up its next pay review from August to January, about three months earlier than usual, so that employees are more likely to experience another pay increase in the spring.

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With retailers struggling to recruit thousands of temporary workers for the busy holiday season, the most recent increase puts Tesco workers on par with John Lewis, just ahead of Sainsbury’s, but behind Aldi and Lidl.

Tesco also said it was freezing prices on more than 1,000 products until next year.

Ken Murphy, its chief executive, said: “We know our customers are facing a tough time and watching every penny to make ends meet.

“As we look to the second half, cost inflation remains significant, and it is too early to predict how customers will adapt to ongoing changes in the market.

“Despite these uncertainties, our priorities are clear. We have the right long-term strategy and we will continue to balance the needs of all of our stakeholders.”

He said it was “hard to tell” whether the government had done enough to help households with their winter bills or whether inflation on food had peaked.

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Murphy demanded the government reduce business rates, a property-based tax, by 50 percent and make up the difference by raising the online sales tax.

According to him, Tesco would be relatively unaffected, but it would benefit stores in underprivileged areas, where retail was frequently the largest employer.

The pay and price announcements came as Tesco reported a decline in pre-tax profits for the six months ending on 27 August to £413 million. 3.25 billion in sales were up 6.7 percent.

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Since price inflation across the grocery market was more than 5 percent during the period, sales at established supermarkets in the UK only increased by 0.7percent, which suggests a significant decline in the number of goods sold.

As more people ate at home instead of going out to eat, Tesco reported a 13 percent increase in sales of its Finest premium own-label line.

In an effort to “celebrate in an affordable way,” Murphy predicted that families will purchase fewer, smaller gifts this Christmas and will manage their spending by cooking at home rather than eating out.

Tesco said it planned to almost double the size of its fast-track delivery service, Whoosh, from more than 400 to 800 by the end of the year, despite evidence that consumers are reducing their spending on home deliveries, with online sales down 11.3 percent.

Source: The Guardian

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