U.K.-based Tesco has defied the market and all analyst expectations and turned in record-breaking U.K. retail results of £3.13 billion ($4.58 billion) profit for the 53 weeks ended Feb. 28. Sales were up 15 percent at £59.4 billion ($86.9 bill

April 6, 2018

2 Min Read

U.K.-based Tesco has defied the market and all analyst expectations and turned in record-breaking U.K. retail results of £3.13 billion ($4.58 billion) profit for the 53 weeks ended Feb. 28. Sales were up 15 percent at £59.4 billion ($86.9 billion).

In the first six weeks of its new financial year, group sales are up 12 percent (excluding petrol) and U.K. like-for-like sales are up 3.4 percent.

U.K. non-food sales rose by 5 percent in the year, compared with 9 percent in 2007/8, with total non-food sales increasing to £8.7 billion ($12.7 billion). Tesco saw growth in electrical goods, games and entertainment, while home-related categories were "challenging." Clothing sales reduced by 2 percent in the year, but Tesco said sales outperformed the market, with good growth in menswear and an improving trend in childrenswear, with a stronger second half performance. The retailer plans to add clothing to its online offer later this year.

Group non-food sales rose by 6 percent to £12.5 billion ($18.3 billion), including £3.8 billion ($5.6 billion) in international business. 

In the U.S., the Fresh & Easy business now trades from 115 stores and the early openings are showing like-for-like growth. However, Tesco reduced the opening program during the 2008/09 financial year and U.S. trading losses in 2008/9 were higher than expected at £142 million ($208 million). Some of the loss was due to currency exchange rates. The U.S. economy is affecting the business and Tesco is adapting the format with more promotions and special offers.

Tesco plans to create 11,000 new jobs in the U.K. this year and 15,000 internationally.

"At a time when customers everywhere are feeling the economic strain, we are responding to their changing needs in all our markets by lowering prices, introducing more affordable products and offering even sharper promotions," says Terry Leahy, chief executive officer. "These actions, combined with our core strengths—in selling food and everyday essentials, owning our own property, and having a broad business base—are helping us to cope well with the effects of the downturn.

"As a result, we have delivered a solid sales and profit performance, both in the U.K. and internationally, while continuing to invest in our long-term strategy for growth. We have made a good start to the new financial year and I am confident Tesco will continue to make good progress even in the current global economic environment."

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