Tesco reports fall in group profits

Tesco has said its performance in Europe and Asia reflects ‘the tough economic backdrop'
Tesco has said its performance in Europe and Asia reflects ‘the tough economic backdrop'
News

18 October 2012

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Tesco’s latest results show the supermarket suffered its first fall in group profits in nearly 20 years.

A return to sales growth in the UK – where like-for-like sales excluding VAT and petrol grew 0.1% in the final three months of the period, compared with a decline of 1.5% in the first quarter – was overshadowed by a downturn in Asia and Europe.

Overall the UK’s biggest grocer recorded a 12% decline in group pre-tax profits to £1.7 billion (€2.2bn) in the six months to 25 August.

According to the latest Kantar Worldpanel figures, Tesco is Ireland’s largest multiple with a market share of 28.7%, and the group’s results show like-for-like sales in Ireland rose 0.2% in the first half of the year. Tesco does not disclose its profits for Ireland. 

Chief executive Philip Clarke said he was "encouraged by our customers’ initial responses to the changes" Tesco has made in the UK, but added that "there is much more to be done".

Clarke also said that "the external environment continues to present challenges all over the world" and that the company’s financial performances in Asia and Europe "reflect the tough economic backdrop and particularly the regulatory changes in South Korea".
Meanwhile, rival Sainsbury’s reported a 1.7% rise in like-for-like sales, excluding fuel but including VAT, in the first half of its financial year to 29 September.

Sainsbury’s, the UK’s third largest supermarket chain, has seen demand increase for its top-end ‘Taste The Difference’ range, which is achieving near double-digit growth.

 

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