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Last Updated:  Tuesday, 8 April, 2003, 16:18 GMT 17:18 UK
Tesco celebrates profits boom

Tesco, the UK's biggest supermarket chain, has beaten analysts' forecasts with annual profits up 13% to 1.3bn.

The group said it had also met targets for its overseas businesses.

Tesco used its results to announce it would create 20,000 new full-time jobs in 2003, 9,000 of them abroad.

The retailer said these would come mainly from new stores, with 59 new openings planned in the UK for the coming year.

Chief executive Terry Leahy said: "It has become a winners and losers market so it's important that we are a winner."

Trolley battle

Tesco is one of five prospective bidders for the rival supermarket chain Safeway.

If four were to become three, we believe customers would be better off if Tesco led that change
Terry Leahy, Tesco chief executive

Its bid has been referred to the Competition Commission along with those of rivals Sainsbury's, William Morrison and Wal-Mart's Asda.

Only retail entrepreneur Philip Green's bid was not referred.

Mr Leahy said he was not surprised by the government's decision to probe all bids.

"We have always understood that competition policy limited consolidation of the four national players in our industry.

"If four were to become three, we believe customers would be better off if Tesco led that change."

The group admitted trading was "tough" in the current market but insisted "we are winning".

Investors were cheered by the optimism, and the company's shares closed up 4.2% at 197.25p.

"The company do talk about a challenging climate, as expected, however, they are performing better than most other grocery retailers in the UK," said Mark Hughes, a retail analyst at Numis.

Online hit

Tesco said it was still taking market share from all areas, including non-food sales such as food and healthcare products.

"We have made good on our 1999 targets and how many people can say that given all that's happened in the world?," said Mr Leahy.

UK operating profits were up 7% in the 12 months to 22 February while overseas profits - for Tesco's operations in Europe, Asia and Ireland - leapt 78%.

Tesco is also one of the few retailers to have made a success of its online shopping venture.

Tesco.com made profits of 12.2m in the 12 months to February, against 0.4m the year before.

Tesco 'surveys Ahold wreckage'
02 Mar 03  |  Business
Electrical goods lift Tesco
14 Jan 03  |  Business
Tesco Ireland to create 1,500 jobs
28 Jan 03  |  Business
BHS owner gears up for Safeway bid
28 Jan 03  |  Business
Tesco joins battle for Safeway
22 Jan 03  |  Business

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