UK supermarket company Tesco has posted a 14.7% increase in annual profit and said it was winning customers from weaker rivals even as its core UK market slows.
Tesco, which enjoys a near 26% share of grocery spending in the UK, reported underlying pre-tax profit of £1.40bn (US$2.17bn) for the year to 22 February, compared to £1.22bn a year earlier, at the top end of forecasts.
Group sales rose 11.5% to £28.6bn for the year, with international sales growing 31.2% to £5.2bn. UK sales meanwhile rose 7.9%.
Group pre-tax profit after one-off items was up 13.3% to £1.36bn.
“It has become a winners and losers market…we are winning customers,” chief executive Terry Leahy told Reuters in an interview.
“As people look for more value in uncertain times they come to Tesco,” Leahy added.
“Tesco is trading particularly well at the moment,” he said. “It is tough, but we are winning.”
Tesco plans to add four million square foot of new retail space in the coming year, up 12% on the previous year, 1.5 million square feet (equivalent to 25 large stores) of which will be in the UK, Leahy said.
The company, which employs around 296,000 staff worldwide, plans to create a further 20,000 jobs this year, a similar number to the amount it created last year.
Tesco’s net debt has risen to £4.7bn, which Leahy said he was comfortable with as profits were rising faster than borrowings as the retailer expands.