Tesco reports record profits of £3.8bn

UK performance still not good enough as bulk of profit increase came from Asian operations, says new boss Philip Clarke Tesco, Britain’s biggest retailer, has reported record profits of £3.8bn – more than £10m a day – but admitted that it needs to do better in its core UK operations. Results for the year to end February, released on Tuesday, showed the bulk of Tesco’s 12.3% profit increase came from its growing Asian operations. Total group sales were £68bn and in the UK sales grew 5.5% to £45bn, with trading profits ahead by 3.8% to £2.5bn. But the performance was not good enough, Tesco’s new boss Philip Clarke admitted. “We didn’t achieve our planned growth in the year and this was only partly attributable to the deterioration in the consumer environment during the second half. We can do better and we are taking action in key areas – for example, to drive a faster rate of product innovation and to improve the sharpness of our communication to customers.” The retailer’s US losses also worsened in 2010, rising to £186m. Tesco said the increased losses reflected acquisition costs and Clarke, who took over from Sir Terry Leahy six weeks ago, reaffirmed his commitment to the US Fresh and Easy business. “Fresh and Easy is loved by customers who shop in it. The easiest thing would be to cut and run, but the sensible thing is to improve the business and get more customers,” he told the BBC Radio 4 Today programme. Clarke suggested he would be taking a somewhat softer approach than his predecessor. “In the way I deal with the press and investors and our own people I can soften [the image] a little. I am a little more open and that’s the style I would like here.” Matthew McEachran, retail analyst at Singer Capital Markets, suggested the sharpening of Tesco’s UK focus would concern rivals. “With over £5bn of sales, and space potentially increasing by 10% per annum, intensification of their offer will result in more pressure for a number of general retailers including those already having to compete harder.” Tesco’s strongest growth came in Asia where profits grew by 30% to £570m. Shares in Tesco opened down by 0.6%, a fall of 2.5p to 397p. Tesco Supermarkets Retail industry Alex Hawkes guardian.co.uk

Posted by on April 19, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.