Tesco Ireland increases sales to €3bn

TESCO saw its sales in Ireland increase more than 5% to almost €3 billion in the year to the end of February 2011.

Excluding petrol, sales grew 3.9% in the year, with the supermarket giant saying the market is still “very challenging”.

It said its customer base grew during the year with more customers opting for own label products. Online grocery sales grew and now represent 1.6% of total sales.

Tesco said it created 760 jobs during the year with store openings in Naas, Westmeath, Galway, Mayo and Waterford, claiming all have traded well.

During the year, Tesco invested €176m in its Irish stores, bringing total investment since 2005 to more than €1.5bn.

Tesco Ireland chief executive Tony Keohane said: “While we have had a good year by adjusting to customers’ changing circumstances and delivering value, the fact is that the market remains very challenging.

“There is no doubt that Irish consumers are experiencing the pressures of the economic downturn and are seeking sustained better value from retailers. We are and will continue to work hard to keep prices down to help customers through these tough times.”

Tesco employs 14,000 people in 131 stores in Ireland, as well as head office and distribution centres.

Meanwhile, Tesco admitted that it must “do better” in Britain after missing growth targets and seeing sales fall from a year ago.

The company promised new products and services after revealing a 0.7% drop in fourth quarter British like-for-like sales, excluding VAT and fuel.

Newly appointed chief executive Philip Clarke said the performance was not good enough as it failed to keep up with rivals in areas such as clothing.

“We can do better and we are taking action in key areas — for example, to drive a faster rate of product innovation and to improve the sharpness of our communication to customers,” he said.

The fourth quarter sales fall marks the first such dip into negative territory for nearly two years. Tesco gave little hope that conditions would improve this year, saying trading would remain challenging, particularly for non-essential items.

The group’s strongest growth came from Asia, where trading profits rose 30% to £570m (€651m).

Tesco’s overall group profits rose 11.3% to £3.5bn on a statutory basis, while revenues hit £68bn.

Tesco Bank saw annual profits rise 5.6% and confirmed aims to launch its first range of mortgages this year.