Tesco, the UK’s biggest supermarket chain, has today (Tuesday) reported a 20.5% rise in pre-tax profits to £2.029bn (US$3.84bn) for the 52 weeks ended 26 February 2005.
Preliminary results show sales for the group as a whole were up 12.4% at £37.1bn. Sales in the UK were up 11.9% at £29.5bn.
“These results again demonstrate the broad appeal of the Tesco brand,” said chief executive Terry Leahy. “They also show that our new growth businesses – in international, in non-food and in services – have contributed as much profit as the entire business was making in 1997.”
Non-food sales were up 17% to £6.0bn, including clothing growth of 28%.
Even though sales through Tesco’s website Tesco.com sales were up 24.1% to £719m and profit up 51.8% to £36m, there were an extra ten million visits to Tesco stores worldwide.
Tesco plans to create an extra 25,000 new jobs worldwide this year, it said.
Edward Garner, Communications Director of TNS Superpanel said the results confirmed the undeniable success Tesco has had within the grocery market over the past few years. “TNS supermarket share information shows that the retailer’s market share has grown consistently and strongly over the last decade and shows no sign of abating,” he said.
“Tesco’s winning formula is largely due to its ability to be all things to all people,” he said. “According to TNS, over 60% of British households shop in Tesco every four weeks. That’s 20% cent more than its nearest rival. The store appeals to wide reaching demographics across the country and has built up a heritage of reliability and trustworthiness, which keeps shoppers returning to its stores. These factors have enabled Tesco to gain close to a third of the British grocery market.”
“Looking towards the future, Tesco will continue to face challenging competition from its nearest competitor Asda as well as the likes of Sainsbury’s, which is showing positive growth trends and Morrisons once the Safeway store conversions are complete,” he said. “Tesco will need to prove its ability to meet increasingly challenging consumers demands and stay a step ahead of the competition.”