Tesco announces annual profits reach 'record high'

Supermarket giant Tesco has set another record, breaking through the £1 billion-a-week sales barrier. The major milestone is masking what has been a tough year for the UK's biggest supermarket, despite announcing annual pre-tax profits of £3.13 billion, up 8.8 per cent, for the first time in its history. The retail giant posted sales of £54.3 billion in the 12 months to February 28. But the growth in profits was far lower than the 11.8 per cent seen the previous year after what has been a tough time for Tesco amid stiff competition and a consumer spending slump. In the third quarter, the chain reported like-for-like sales up by 2 per cent, half the rate seen in the previous three months and the worst performance since the last recession. Tesco's 2.5 per cent sales growth notched up over the seven-week festive period represented its worst Christmas in nearly 20 years. And the most recent data on the sector suggests its UK market share has fallen again to 30.4 per cent for the 12 weeks to March 22. Tesco's fledgling US venture, Fresh & Easy, which launched in November 2007, is forecasted to show higher than expected losses, while Ireland and Eastern European may reveal the impact of the economic troubles. Aside from its overseas expansion, Tesco has been looking for growth in the competitive UK market by embarking on a range of ventures, from financial services to mobile phones. It confirmed plans at the weekend to double the number of its in-store phone shops to 100 over the next year in a move that will pit it against mobile phone retailers such as Carphone Warehouse.

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ITN | April 21, 2009

Tags:. .retailers. .shops. .double. .fledgling. .tesco