Tesco profits slide, as Irish €70m investment continues
Tesco’s half-year profits have fallen by nearly 25 per cent after sales declines in the UK and every one of its overseas markets, including Ireland. This is according to its first half-group accounts published today.
It recorded pre-tax profits of UK£1.39bn sterling, down 24.5 per cent year-on-year with currency effects stripped out after being hit by restructuring costs and steep profit falls across the European Union and Asia.
In terms of its operations in the Irish market,Tesco said as the economy slipped back, albeit temporarily, into Recession, consumers have faced further pressures on household finances.
“Challenging external conditions have held back our trading performance, particularly in Europe. Overall economic growth has seen further declines in some of our largest markets, such as Ireland and Poland, with consumer confidence still tracking at historically low levels,” it said.
As a result, it said discount stores have fared better than the other supermarket chains in Ireland.”In Ireland, the economy slipped back, albeit temporarily, into Recession and consumers have faced further pressures on household finances. As a result, the limited-range discounters have fared better than those, like us, with a broader offer. We have plans to address this in the second half. Despite the challenging conditions, Ireland, like Hungary, remains a high-returning business,” the company added.
Among the highlights of the Irish operation outlined by Tesco in its first half-group accounts were:
- More than 11,000 Irish farm families supply their produce
- During the first half it sold 35.6 million litres of Irish milk.
- Its small local supplier recruitment drive saw a further 26 new local suppliers listed in their local stores – 103 Irish small and mainly artisan suppliers have joined Tesco during the past two years.
- The Tesco/Bord Bia Supplier Development Programme was launched assisting 18 small and medium enterprises to expand their position with Tesco in Ireland and internationally.
- In total more than 400 Irish food and drink companies supply their products to Tesco. Approximately 300 of these represent small food suppliers employing less than 50 people.
- More than €700m worth of quality Irish food and drink is exported to Tesco stores internationally per annum. Tesco accounts for up to nine per cent of Irish food exports.
Tesco this summer announced the development of seven new stores as part of a €70m investment programme in Ireland. The two Express stores opened in the past fortnight (Glasnevin, Dublin and Douglas Road, Cork) and are performing well, the company said. It recently announced the creation of 200 new jobs in Ireland in the coming 12 months through the opening of seven new stores, six new mobile phone shops and the expansion of our graduate programme. Tesco already employs 15,200 Irish colleagues currently working in its stores, depots and head office. In addition, a new express store will open in College Green, Dublin next Tuesday 8 October.