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Tesco increases UK profits, but says "we can do better"

Published: 19 April 2011
Tesco has reported group sales up 8.1% to £67.6bn for the 52 weeks to February 26, 2011.
Tesco increases UK profits, but says 'we can do better'
The group also saw a 12.3% rise in underlying profit before tax to £3.8bn.

With a new global Executive Committee in place, and a new UK board appointed, the company has set out six objectives going forward, including an increased focused on the UK core business.

These include keeping the UK "strong and growing", becoming a multichannel retailer "wherever we trade" and to "be outstanding internationally, not just successful".

In the UK, sales increased by 5.5% to £44,571m, while trading profit went up 3.8% to £2,504m. Like-for-like sales were flat (excluding petrol and VAT), and the UK business didn't achieve planned growth during the year. "We can do better," said the report, "and we are taking action in key areas, for example to drive a faster rate of product innovation and to improve the sharpness or our communication to customers."

While an improving economic environment is helping the company in its markets in Asia, Europe and the US, in other countries, including the UK, demand growth remains "subdued" due to higher taxes, public sector contraction and rising fuel costs, said the report. In these markets, "we are assuming that the retailer environment will remain challenging in 2011."

Commenting on the results, chief executive Philip Clarke said: "I am pleased with our strong overall performance in the face of some challenging conditions and we are well-positioned, with multiple opportunities to deliver long-term growth and rising returns. I want to thank the 500,000 people who work at Tesco for their contribution to this performance."

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