Tesco posts record profits

Tesco’s underlying pre-tax profits passed the £3bn mark for the first time in the year to the end of February, totalling £3.1bn, an increase of 8.8 per cent.

Group sales were £59.4bn, up 13.5 per cent on a consistent 52 week basis. UK sales grew 9.5 per cent to £41.5 bn, with like for like sales up 4.3 per cent. The company said it saw strong evidence of customers trading down as the year progressed. Non-food sales were up 5 per cent, but clothing sales were down 2 per cent.

International sales grew 13.6 per cent at constant exchange rates, with Asia performing particularly well, where sales grew almost 20 per cent at constant rates. European sales were up 6.9 per cent at constant rates on a consistent 52-week basis, with conditions worsening as the year progressed.

Tesco’s progress in the US continues to be slow however, with trading losses of £142 million being reported on sales of £208 million.

“We are responding to customers’ changing needs in all our markets by lowering prices, introducing more affordable products and offering even sharper promotions,” said chief executive Sir Terry Leahy. “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.”

The new financial year has started with a 12 per cent rise in group sales, excluding petrol, over the first six weeks, with UK like for likes up 3.4 per cent.

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