SUPERMARKET CHAIN Tesco increased sales in Ireland last year by 9.8 per cent to €2.99 billion.
The company did not release a profit figure for its Irish operations. However, in Europe, trading profit rose by 24.8 per cent to £397 million (€494 million) on sales of £7.8 billion, representing a margin of 5 per cent. If this were applied to Ireland, it would suggest a trading profit of around €156 million.
Tesco said that the performance in Ireland was held back by planned commissioning costs for its new central distribution centre in Donabate, Co Dublin, which opened recently.
About one-third of the €267.6 million rise in sales was attributable to new stores, with the remainder accounted for by organic growth, the retailer said.
Six new stores were opened during the year, bringing the number of Tesco stores in Ireland to 101.
Three new "express" stores were opened in Dublin, while larger replacement stores were opened in Wexford and in Celbridge, Co Kildare, with major store extensions carried out at seven locations.
Sixteen new stores are scheduled to open in the current financial year, creating 1,225 additional jobs, the company says. Capital investment this year will exceed €150 million.
Tony Keohane, Tesco Ireland's chief executive, said the results were ahead of expectations. Sales across all food categories grew, according to the retailer.
Mr Keohane said he expects food inflation to ease in the coming year.
"The international factors that have affected food prices will start to unwind as the year progresses. We will see food inflation coming down. Our sense is that the worst of that is easing off and our job is to bring value to customers by continuing to ensure that prices are reflective of the market," he said.
Tesco has not witnessed the drop in footfall figures recently recorded in high street retail areas, but economic uncertainty may be evident in changing shopping patterns, he said.
"We are seeing early signs of people being more aware of special offers, more aware of value, buying slightly bigger packs where there's an opportunity to save a bit, so we are aware of some of those trends," said Mr Keohane.
"As people become more price-conscious, value-conscious or bargain-conscious, we can be there and we think there is still good opportunity for growth as reflected by the 16 new stores we are opening next year."
He said the recent National Consumer Agency (NCA) survey showing that consumers could make massive savings by doing their food shopping in discount stores such as Lidl and Aldi rather than Tesco or Dunnes did not compare like with like.
"The Tesco range is from finest to value. We have international brands and local brands, we have Tesco value and the NCA report picked some of those ranges to compare against the discounters, but didn't pick the value range so we are quite confident that what we offer is right."
In non-food, Tesco said it recorded "significant growth" in clothing sales as a result of a complete redesign and restructuring of the category. Sales of hardware and household products also grew strongly, it said.
Non-food now accounts for about 24 per cent of sales.
The online shopping service, Tesco.ie, recorded sales of €26.7 million, up 29.6 per cent in the year. Mr Keohane said he expects a similar growth rate this year. The service now has more than 200,000 registered customers.
At group level, Tesco's sales rose by 11.1 per cent to £51.8 billion, while its trading profit rose by 11 per cent to £2.75 billion.
It said sales at its new US stores were ahead of budget, and sales densities were already higher than the US supermarket industry average.
Facts: shopping by the numbers
Tesco Plc, the world's third- biggest retailer, reported a record £2.8 billion (€3.49 billion) annual profit yesterday and said it had made a strong start to its new financial year, driving up its shares. Here are some key facts about the company:
• Market capitalisation is £30,525.62 million and the firm employs 318,283 worldwide;
• The number of stores stands at more than 2,700 globally. Its chief executive is Terry Leahy;
• Tesco made a trading profit of £2.75 billion in the year to February 23rd, led by strong growth in its international and online businesses;
• Tesco is Britain's biggest retailer and has more than 30 per cent of the market in Britain, double that of its nearest rivals Asda and Sainsbury;
• It has stores in Britain, the Czech Republic, Hungary, Poland, Ireland, Slovakia, Turkey, China, Japan, Malaysia, South Korea, Taiwan and Thailand.The supermarket giant also has 60 stores in the United States;
• Its recent acquisitions include Leader Price Polska in 2006, which has 146 stores in Poland. Also in December 2006, it bought the Makro business in Malaysia which operates eight stores comprising over 74,000sq m (800,000sq ft) of sales area. - ( Reuters )
