Tesco suffers fall in annual profits

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Martyn Fisher


Tesco suffers fall in annual profits

Six per cent slump in group trading annual profit for the supermarket giant, although online sales growth offers some respite

Tesco suffers fall in annual profits

Clarke: 'Accelerating our growth through new channels.'

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Tesco has reported a 6 per cent fall in group trading annual profit to £3.3bn as it continues to lose market share to discount rivals.

It is the second year in a row in which the supermarket has announced falling profits.

Tesco's like-for-like sales, which don't include new store openings, also fell by 1.4 per cent.

The retailer also announced a £734m loss of value in its European business, which has been hit by the eurozone crisis.

In Europe, group trading profit fell 28 per cent to £238m as sales in the Czech Republic, Hungary, Poland, Slovakia, Turkey, and Ireland all slumped.

Group trading profit was also down 5.6 per cent in Asia to £692 m.

Despite this, the supermarket reported strong growth of 11 per cent in its UK online grocery sales, while sales at its Tesco Express stores grew 1.1 per cent.

Tesco chief executive Philip Clarke said: "We are transforming Tesco through a relentless focus on providing the most compelling offer for our customers. Our results today reflect the challenges we face in a trading environment which is changing more rapidly than ever before. We are determined to lead the industry in this period of change.

"Having strengthened the foundations of our business in the UK, we are now accelerating our growth in new channels and investing in sharper prices, improved quality, stronger ranges and better service."

The group also announced plans to set up special academies to teach fresh produce department staff about the supply chain.

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