Profits up 10% to £3bn-plus at Tesco

In the first six weeks of the current financial year, like-for-like sales growth, excluding petrol, is running at 3.4%, although chief executive Sir Terry Leahy acknowledged the retailer was not exempt from the economic downturn and the increased competition from rival retailers.

Reviewing the past financial year, he said: “In the UK, Tesco coped well with recovering competitors and a difficult non-food market, particularly in the second half, to deliver solid progress in the year.

“UK retail sales grew by 9.1%, including a like-for-like increase, including petrol, of 4.3% (3% excluding petrol).

“Both customer numbers and spend per visit increased and we also delivered robust margin and profit improvement.

“In the current year, we expect to trade the business harder to give what help we can to families whose budgets have become stretched and who are worried about their jobs.

“Our competitive offer is strong and we are investing more in cutting prices, sharpening our promotions and putting even more affordable products on our shelves, particularly through the launch of more ‘Discounter’ ranges.

“Whilst price and value matters more to many customers at times like these, as always, we are improving all aspects of the shopping trip, including service and availability.

“As part of this, we are planning to re-launch and invest substantially more in Clubcard - our unique way of saying ‘thank you’ to our customers - in the coming weeks,” said Leahy.

Tesco is looking to open new stores and extend existing outlets in the UK over the coming year at the same level it achieved over the last 12 months, said Leahy.

“We opened a total of 2msq ft of new sales area in 2008/9, of which 362,000sq ft was in store extensions, principally for Extra,” he said.

“We opened another 11 Extra hypermarkets - six from extensions to existing stores and five new stores, bringing the total to 177, with a further 15 planned this year.

“Extra now represents 40% of our total sales area.

“We also opened 21 new superstores and 125 new Express stores, bringing the overall total number of Tesco stores to 2,282.

“In the current year, we aim to open a similar amount of new space across our formats - equivalent to an additional 6.4% of sales area.”

source: talkingretail.com