Tesco Ireland has reported annual sales of more than €2 billion for the first time, as the company's parent in Britain declared pretax profits of almost €3 billion from its global operations.
While the fast-growing supermarket operator does not publish a profit figure for its 89 Irish stores, retail analysts in London believe the pretax profit margin from the business is in the region of 6.5 per cent. That implies profits in Ireland of about €139.36 million on the company's declared sales of €2.144 billion in the year to the end of February.
The declared sales figure was up by 11.9 per cent or €227 million in the period, indicating that the supermarket group is making solid gains in the Irish market.
However, like-for-like growth in the business was significantly lower than the top-line indication because it reflected sales at seven new or replacement stores in the period.
Tesco chief executive Sir Terry Leahy told analysts in London that like-for-like sales in Ireland grew by 4 per cent in the entire year. This is marginally behind annual growth of 5 per cent in the Irish grocery sector as recorded by retail analyst Taylor Nelson Sofres.
Like-for-like trading in Ireland increased by 3 per cent in the first six months of Tesco's financial year, Sir Terry said, implying that like-for-like sales accelerated in the second half of the year by some 5 per cent.
Tesco employs 11,800 people in Ireland in a business that includes superstores, supermarkets, five filling stations and a personal finance offering. Thirteen stores are open 24 hours, seven days per week, while a further 19 are open 24 hours Monday to Friday.
Sir Terry said at a briefing that Ireland was still a market with "very good potential" for Tesco because retail provision still lagged behind growth in the economy at large.
The declared 11.9 per cent increase in Irish sales was marginally behind the comparable figure for Tesco's entire business, where sales grew 12.4 per cent to £37.1 billion (€54.32 billion). The underlying pretax profit in the entire business grew by 20.5 per cent to £2.03 billion.
In a statement, Tesco Ireland reported particularly strong growth in non-food products such as clothing, household goods and CDs.
Food categories that grew strongly included dairy and bakery products, and fresh meat. New product ranges introduced in the year included gardening supplies and an extended electrical range.
All products are now centrally distributed by the company, which attributes its growth to price reductions.
Tesco Ireland said it increased the number of Tesco credit cards in circulation by 50 per cent to 20,000 and introduced new loan and car insurance products during the year.
Total Tesco purchasing from Irish companies in Ireland and Britain now exceeds €1.5 billion, the company said.
It has plans to open a superstore in Midleton, Co Cork, this year in addition to new supermarkets at Carrick-on-Shannon, Co Leitrim, and Newcastlewest, Co Limerick. A new filling station will open at Dundrum Town Centre in south Dublin.
