Tesco has topped sales of £1 billion a week for the first time, along with posting a record £3bn annual profit - the highest ever achieved by a UK retailer.
The UK’s largest supermarket chain has reported underlying annual pre-tax profits of £3.13bn, 10 per cent higher than the previous year. Group sales reached £58.4bn.
Tesco chief Sir Terry Leahy is confident the retailer will “continue to make good progress even in the current global economic environment”.
In a statement, the supermarket said it had “coped well with recovering competitors and a difficult non-food market”, seeing an increase in both footfall and also consumers’ spend.
However, Tesco has struggled in its US venture, posting more than a doubling in trading losses in its Fresh & Easy outlets, from £62 million to £142m.
Like-for-like sales in the UK, excluding petrol, grew by three per cent in the year to February 28.
Tesco has revealed plans to open a further 8m sqft of new space this financial year, three-quarters of which will be outside the UK. The retailer also plans to create 26,000 jobs, including 11,000 in the UK.
The National Farmers’ Union (NFU) has responded to the results, recognising how impressive they are but warning that government must take its responsibility to consumers seriously.
Speaking after the announcement, NFU president Peter Kendall said: “Undoubtedly this is a Great British success story and, in many cases, British farmers have shared in that success. However, my worry is that as the UK’s flagship retailer weighs in with another record-breaking set of results, government may be blinded by Tesco as one of the few bright lights in the economy and forget its competition responsibilities.
“To a Tesco supplier, ‘savings in the supply chain’ often means that they will be subject to even more unreasonable demands, including lump sum payments, to contribute to that impressive bottom line. Following the conclusion of the Competition Commission investigation last year, it is clear that unreasonable behaviour impacts on the consumer. In the consumer’s best interests, government must implement the commission’s remedies, including a grocery market ombudsman, if it is unable to secure undertakings from retailers such as Tesco.”
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