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Britain’s biggest supermarket chain Tesco well-placed for the global recovery

By Germaine Lombardo for CEOWORLD Magazine Updated:October 6, 2009

Britain’s biggest supermarket chain Tesco (NASDAQ:TESO) (UK:TSCO) (OTC:TSCDY) Tuesday posted first-half attributable net profit of 1.03 billion pounds ($1.6 billion), compared to 1.01 billion pounds a year ago.

Revenue rose 9.2% to 27.8 billion pounds.

The company said it had made ’substantial changes’ to its business in Ireland, which it said was facing the ‘dual challenge of a severe recession and cross-border trading’.

It said that by integrating more of its international brand buying with its UK business, it reduced the prices of 12,500 products in its Irish stores by an average of 22%. The cost of this was £15m in the first six months of the year.

The supermarket group, which runs over 4,300 shops in 14 countries including Ireland, said it made profit before tax and one-off items of £1.57 billion pounds on a 9.3 per cent rise in sales to £27.8 billion pounds.

Sales in Tesco’s key British market — around two-thirds of the total — rose 3.1 per cent for stores open at least a year, excluding fuel and VAT sales tax, in the second quarter. That was down from 4.3 per cent in the first quarter,

Tesco said that the price of 12,500 products in Ireland were reduced by an average of 22 per cent following the introduction of its price-cutting programme earlier this year as a response to the recession and a rise in cross-border shopping.

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