The grocer announced today that it had crossed the£2 billion threshold in underlying group pre-tax profit for the 52 weeks to February 26, with a rise of 20.5 per cent to almost£2.03 billion. Sales for the group were up 12.4 per cent to£37.1 billion.
In the UK, sales were up 11.9 per cent to£29.5 billion, while underlying operating profit grew 13.1 per cent to£1.69 billion. Like-for-like sales were up 9 per cent and non-food sales rose 17 per cent to£6 billion, including a clothing growth of 28 per cent.
The retailer said prices rose by only 0.1 per cent, driven entirely by increases in the cost of petrol. Deflation in stores was achieved by investing£230 million last year in reducing prices, plus a further£67 million this month. Petrol had a significant impact on sales growth. Excluding fuel, UK like-for-like sales growth was 7.5 per cent.
Internationally, sales reached£7.6 billion for the period, with underlying operating profits of£370 million. Tesco said like-for-like sales were up 5.5 per cent for its international business in the first quarter of this year. The retailer added that Asia and central Europe were key areas of focus during the period.
Tesco chief executive Sir Terry Leahy said: 'These results again demonstrate the broad appeal of the Tesco brand. They also show that our new growth business - in international, non-food and services - have contributed as much profit as the entire business was making in 1997.'