Page last updated at 07:20 GMT, Tuesday, 20 April 2010 08:20 UK

Volcanic ash: Tesco delivers Kenyan produce via Spain

Tesco Metro
Tesco has seen a strong increase in group sales

Tesco's boss has said the supermarket has been bringing produce from Kenya into the UK via Spain as flights have been grounded because of volcanic ash.

Sir Terry Leahy told the BBC there had been disruption, but that it had mainly affected members of staff, as opposed to the 1% of its produce flown by air.

"We have helped Kenyan farmers by allowing them to send flowers and fruit to Spain, and collecting there."

It came as the firm reported annual pre-tax profits of £3.176bn for 2009.

Sir Terry said that produce was being moved from Kenya to a hub in Spain, and that the firm was then picking it up for transportation by truck to the UK.

'Weathered storm'

The figure, for the year to 27 February, was up 10% on the previous 12 months.

The UK's biggest grocer also said that there had been a 8.5% increase in group sales, excluding petrol.

It said it planned to create 16,000 jobs this year, with 9,000 in the UK.

Sir Terry said the firm had "weathered the economic storm well" and that the business was now stronger than before the recession.

The figures came despite slowing UK sales growth in the past year.

'New opportunities'

International sales accounted for £17.5bn of its £56.9bn annual revenues.

The retailer expects non-food and international sales to grow fastest in the recovery, although the group recorded a £165m trading loss at its US business.

But Sir Terry said the firm had opened up "new opportunities around the world" with "market-leading businesses" in Asia, Europe, the US, as well as in the UK.

He added: "We have gone into new areas of business such as telecoms... and banking."

Sir Terry told the BBC that the new jobs would be around the UK in stores, call centres, warehouses and distribution centres.


Meanwhile, the firm's non-food business generated £9bn in UK revenues.

Toy sales were up 25% year on year, boosted by the demise of High Street stores such as Woolworths.

In addition, sales of clothes reached £1bn for the first time.

Trading profits at its banking arm, with more than six million customers, were up 13% to £250m.

Tesco said it had performed strongly in a "challenging" retail banking market.

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