Tesco profit soars

April 10, 2001
Web posted at: 0750 GMT

LONDON (CNN) -- The UK's largest food retailer Tesco on Tuesday posted annual pretax profits above the 1 billion pound ($1.4 billion) mark for the first time.

The supermarket chain said profit before tax for the year ended February 24 rose 13 percent to £1.05 billion from £933 million last year, with sales increasing 12 percent to £22.8 billion.

Tesco said its market share increased in its core UK food business and sales of non-food products also improved. Net profit increased 13.7 percent to £766 million from £674 million last year.

The company said it is continuing to build its international presence, mainly in continental Europe and Asia, while its Tesco.com e-commerce business has almost 1 million registered customers. The company said it now receives 70,000 grocery orders per week over the Internet.

"This year the Tesco strategy has continued to deliver for the customer," said Chief Executive Terry Leahy, adding that the supermarket chain "made good progress on our long-term transformation from a domestic to an international retailer."

Tesco said its 68 overseas hypermarkets contributed £2.9 billion to sales and it will double the number of overseas stores by 2002.

The company said it was working closely with farmers to maintain confidence in British agriculture amid the foot and mouth outbreak in the UK.

"Our main suppliers are paying farmers more quickly for meat and are paying above the market price," said Tesco. "This has contributed to rising costs, part of which we have absorbed to help the farmers through their difficulties."

Tesco (TSCO) shares fell 2.2 percent in London trading to 263 pence in morning trade.

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