TESCO chief executive Sir Terry Leahy yesterday said that the UK was “past the low point” of the slump as he unveiled bumper profits and sales.
Britain’s biggest retailer said that group sales had jumped 8.3 per cent to £30.4bn during the 26 weeks to 29 August – meaning the giant supermarket chain was ringing over £1bn in total sales through its tills each And pre-tax profits nudged up by 1.5 per cent to £1,419m in the period.
Leahy said that as the UK economy was improving shoppers were beginning to “treat themselves” again – with sales of its organic, “Finest” and ready meal ranges lifting.
He predicted a “slow and steady” recovery for the UK but said Tesco did not rely on “massive growth” to boosts its earnings as it sold “everyday essentials – not luxury goods”.
Tesco’s profits have recently been hit by the group’s introduction of lower-priced discount ranges. But Leahy argued the self-imposed price deflation had successfully stemmed the flow of cash-strapped shoppers to price conscious rivals like Asda, Lidl and Aldi.
And Tesco said it was renaming its Personal Finance arm to Tesco Bank to reflect the group’s long term objective of creating a “full service retail bank”. It will soon start selling current accounts in store.
It recently spent £950m buying back a 50 per cent stake in its finance arm from Royal Bank of Scotland and has tied up with insurer Fortis.
But the group dismissed speculation it may acquire bailed out Northern Rock saying it had “no plans to do so”.
FAST FACTS TESCO
&9679; Tesco currently has 30.9 per cent of the UKgrocery market and has 2,458 stores in the UK.
&9679; Its recent acquisition of Korea’s Homever stores will increase its footprint in Asia, but its Fresh&Easy US chain is suffering in the slump.