Tesco Ireland profit figures allegedly revealed

Tesco Ireland chief executive Tony Keohane. The company said the document contained information that was inaccurate and out of date
Tesco Ireland chief executive Tony Keohane. The company said the document contained information that was inaccurate and out of date

Tesco's heavily guarded Irish profit margins were allegedly revealed to The Irish Times, while the media spotlight continued to shine on its new border price drops

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19 May 2009 | 0

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As we went to print, The Irish Times revealed it had gained access to a “confidential draft business plan” disclosing details of Tesco Ireland’s profit margins, which up to now have never been released to the public.

The document allegedly revealed that the retailer achieved 9.3% profit margin in Ireland last year and is projected to increase the figure by 0.2% this year.

This would represent a difference of over 3% compared with the margin attained by the parent company, which is less than 6%. The document reportedly also states that Tesco Ireland was on course to make profits of €248 million last year, with profits projected to rise to €255 million this year.

The Irish Times went on to say that the mysterious document outlines details on “how Tesco aims to become significantly cheaper on brands for which people travel to Northern Ireland,” just six days after the retailer announced the scheme in Drogheda. The supposed leaked document informed the paper that Tesco’s competitors “cannot match its price investment” and that it will “boost profit and market share in a declining market.”

Following the revelations which made the front page of The Irish Times, Tesco Ireland released a statement saying that the report was “based on a draft planning document containing information, much of which is inaccurate and now out of date.”

It added: “The position outlined in the report does not reflect the current business position, particularly following the excellent customer response to our investment last week in reducing 12,500 prices in 11 border stores and other nationwide price reductions.”

Some industry sources have speculated that the document may have been leaked from the UK, from where previous leaked materials are said to have emanated.

On 5 May Tesco reopened 11 of its stores in border towns having shut them for the weekend to revamp the offering with the retailer’s new, cheaper imported lines and cut price brands. The price switch within the 11 stores comprised of 12,500 price cuts of an average 22%, and further nationwide price cuts on meat, milk and poultry.

said that the same number of Irish brands remains on shelf as before and that Tesco is “committed to giving Irish consumers the choice.” Keohane asserted that Tesco Ireland had not adopted UK planograms under the new scheme.

 

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