By Max Clarke
Tesco reported this morning a record pre-tax profit of some £3.8 billion- a jump of 12.3% from the previous year.
While this figure appears to affirm the supermarket giant’s dominant status in the UK, behind the figures the story is more complex.
Much of the profit spike was driven by the retailer’s continued and accelerating success across Asia and Eastern Europe, which accounted for 70% of the profit growth.
Sales in the UK, accounting for two thirds of Tesco’s market, have actually witnessed a slight drop of almost 1%, seeing their share price shrink 0.5% on the news.
The US saw stellar performance, jumping 20% from Q4 2008 to Q4 2010, though at just over £500 million in sales out of a global total of sales of £67 billion, the market remains small.
Tesco group Chief Executive Philip Clarke, who told BBC radio 4 that he will guide the company in a less aggressive, ‘softer’ approach to his predecessor, commented:
“We have equipped the business for global growth with new management structures and teams —including an experienced UK Board, which is bringing more focus and energy to our largest business.
“Asia and Europe made excellent progress contributing nearly 70% of our profit growth in the year. The momentum in the USA is building but still has some way to go."