Supermarket giant Tesco today underlined its dominance after posting record profits of £2.55 billion – equivalent to more than £4,800 a minute.
The retailer’s underlying pre-tax profits for the year to 24 February were more than 13 per cent ahead of the previous year.
Analysts say that £1 in every £3 spent in the UK on groceries is now spent in the supermarket and the group’s 31.2 per cent share of the grocery market is nearly the same as the combined share of its two nearest rivals, Asda and Sainsbury’s.
The supermarket’s latest profits figure sparked protests from Friends of the Earth, which said the time had come to ‘curb the power of the Tesco juggernaut’.
Campaigner Vicki Hird said: ‘The supermarket giant’s market dominance is bad news as it allows it to dictate conditions to suppliers and to drive High Street stores out of existence.’
The Competition Commission is also investigating the grocery sector amid claims that the larger stores are squeezing out smaller retailers.
Tesco’s gathering strength in areas such as DVDs, clothing and household items was shown with a growth of UK non-food business sales of 11.6 per cent, despite a tougher domestic consumer environment. The group’s non-food sales reached £7.6 billion – 25 per cent of UK sales in total.
The company saw strong growth of electronics, DIY, toys and sports goods from its larger Tesco Extra stores. The firm’s clothing range – which includes its £3 jeans – saw sales increase by 16 per cent.
Tesco.com, which now has 850,000 regular customers and more than 250,000 orders a week, saw sales increase 29.2 per cent to £1.23 billion.
The company has increased its Tesco Direct catalogue to 7,000 products and reported a ‘pleasing’ performance from its six Homeplus trial stores selling only non-food goods, although it has made no decisions on a further roll-out of the format.
Tesco’s personal finance business made net profits of £65 million, despite tougher conditions in its core motor insurance and credit card markets.
Chief Executive Sir Terry Leahy, who has been at the helm of the business for 10 years, said the company had made ‘good progress’ and coped well with challenging conditions in some markets.
Tesco had 2,700 stores at the end of the last financial year, of which 1,500 were in the UK.
It also had international stores in the Czech Republic, Hungary, Japan, Malaysia, Poland, Republic of Ireland, Slovakia, South Korea, Thailand and Turkey. It also has a joint venture in China.
The company makes 17 million sales in the UK every week and delivered more than 14 million items of grocery during Christmas week last year – its busiest Christmas ever.
Its Clubcard loyalty scheme has been running for 12 years and has more than 13 million members.
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