Profits at British retailer Tesco topped £2 billion (€2.9 billion) for the first time as the company posted another year of double-digit sales growth and raised the pace of international expansion.
Tesco chief executive Terry Leahy
Group sales rose 12.4 per cent to £37.1 billion (€54 billion), but chief executive Terry Leahy was cautious on whether this performance could be maintained.
"We've got a very good strategy for growth in the future. We can grow for some time - but not necessarily at this rate, we don't plan to grow at this rate," Mr Leahy said,
Tesco stock, up around a quarter in the past year, fell more than 1 per cent in early trade on what observers said was a slightly more clouded outlook.
Tesco's rapid expansion, dominant market position and diversification into areas such as financial services and telecoms has led to criticism from consumer groups and some suppliers, saying the company has become too powerful.
But Mr Leahy disputed this was a problem, and said there was particular scope for growth in non-food lines, where the group enjoyed a 17 per cent UK sales increase in the past year.
Non-food lines showing particularly strong growth in 2004/5 included home entertainment products such as CDs and DVDs, which grew at 20 per cent, and news and magazines, where turnover was up by 26 per cent.
Tesco said trade in Ireland has benefited from strong sales growth in existing stores and an acceleration in the growth new store openings.
Tesco opened seven stores with 202,000 square feet of new sales area during the year, an increase of 11 per cent. A further six new stores, with 108,000 square feet of sales area, are planned this year.