Tesco has unveiled plans to spend £1 billion to boost its operations after announcing its first UK profits fall in 20 years. Although overall group profits increased by 1.3 per cent to £3.8 billion for the past year, earnings from Tesco’s domestic business fell by 1 per cent to £2.5 billion. Total sales for the group rose by 7.4 per cent to £72 billion. However, sales for the fourth quarter in the UK fell by 0.5 per cent on a like-for-like basis.
Tesco chief executive Philip Clarke announced a £1 billion package of measures to boost the group’s domestic business. The plans included spending on Tesco stores to give them a “warmer look and feel” while cutting the number of new store openings by a third. Tesco plans to extend the Click& Collect service to more stores. The retailer will also improve the range and quality of its own-label products. It plans to transform its online presence. With consumers become more familiar with online shopping and mCommerce, Tesco plans to transform its online operations.
“The last few months have seen us drive a faster pace of change in Tesco, particularly in the UK, reflecting our determined focus on the immediate objectives for the group that were set out last April,” said Clarke. “We are committing over £1 billion to make the UK shopping trip better for customers: more staff giving improved service in-store; refreshed stores that are better and easier places to shop; lower prices and even more value from an improved product range.”
“As we improve the shopping trip for our customers, it will follow that our sales growth and financial performance will improve too.” (18 Apr)
© 2012 ESM: European Supermarket Magazine
