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You can find the current article at its original source at https://www.theguardian.com/business/2018/oct/03/tesco-profits-fall-despite-uk-sales-surge-share-price
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| Tesco profits fall despite sales surge in UK | Tesco profits fall despite sales surge in UK |
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| Tesco has increased its UK sales at the fastest pace in at least a decade, boosted by strong growth at its new Booker wholesale chain. | |
| But shares in the UK’s biggest retail group fell almost 9%, after problems at its Thai and Polish operations meant that operating profits over the first half fell about £45m short of expectations, at £933m. | |
| Investors were spooked as sales at Tesco’s Thai chain fell 7% at established stores and profits tumbled nearly 30% as the company suffered from a change to government welfare vouchers, which can no longer be spent in its supermarkets. It also stopped selling bulky goods. | Investors were spooked as sales at Tesco’s Thai chain fell 7% at established stores and profits tumbled nearly 30% as the company suffered from a change to government welfare vouchers, which can no longer be spent in its supermarkets. It also stopped selling bulky goods. |
| Head office Welwyn Garden CityChief executive Dave LewisStores 6,809 worldwide/3,400 UKEmployees 460,000/310,000 UKMarket share 27.6%Annual sales £51bnProfit last year £1.3bnShopper visits a week 79m (worldwide) | Head office Welwyn Garden CityChief executive Dave LewisStores 6,809 worldwide/3,400 UKEmployees 460,000/310,000 UKMarket share 27.6%Annual sales £51bnProfit last year £1.3bnShopper visits a week 79m (worldwide) |
| Head office LondonChief executive Mike CoupeStores 1,414 grocers (+ 800 Argos)Employees 195,000Market share 15.8%Annual sales £29bnProfit last year £503mShopper visits a week 26m | Head office LondonChief executive Mike CoupeStores 1,414 grocers (+ 800 Argos)Employees 195,000Market share 15.8%Annual sales £29bnProfit last year £503mShopper visits a week 26m |
| Head office LeedsChief executive Roger BurnleyStores 642Employees 165,000Market share 15.6%Annual sales £22bn (2016)Profit last year n/aShopper visits a week 18m | Head office LeedsChief executive Roger BurnleyStores 642Employees 165,000Market share 15.6%Annual sales £22bn (2016)Profit last year n/aShopper visits a week 18m |
| In Poland, Tesco closed 18 loss-making stores and said it would close at least a further 13 as it struggled to reduce costs in the business after new laws stopped retailers trading on Sundays. | In Poland, Tesco closed 18 loss-making stores and said it would close at least a further 13 as it struggled to reduce costs in the business after new laws stopped retailers trading on Sundays. |
| Tesco’s established stores in the UK and Ireland increased sales by 4.2% in the three months to the end of August, a step up from 3.5% in the previous quarter. Growth at the Tesco chain improved to a healthy 2.5%, but Booker increased sales by just over 15%, partly helped by gaining access to Tesco’s distribution network, which helped it improve deliveries to its independent retail clients. | Tesco’s established stores in the UK and Ireland increased sales by 4.2% in the three months to the end of August, a step up from 3.5% in the previous quarter. Growth at the Tesco chain improved to a healthy 2.5%, but Booker increased sales by just over 15%, partly helped by gaining access to Tesco’s distribution network, which helped it improve deliveries to its independent retail clients. |
| Dave Lewis, the chief executive, said: “We are firmly on track to deliver our medium-term ambitions and are continuing to improve the quality and value of our offer for customers in all of our markets. In doing so, we are well positioned to deliver strong, sustainable returns for shareholders.” | |
| He said trading was going well at its two new Jack’s discount stores, which opened last month. Two more are due to open on Thursday – in St Helen’s and Edge Hill, near Liverpool. | |
| Lewis said there was uncertainty about the future in the face of Brexit, where the “biggest single challenge” would be the impact of a no-deal exit from the EU on deliveries of fresh food from the continent. “The possibility of stockpiling fresh food is very very limited,” he said. | Lewis said there was uncertainty about the future in the face of Brexit, where the “biggest single challenge” would be the impact of a no-deal exit from the EU on deliveries of fresh food from the continent. “The possibility of stockpiling fresh food is very very limited,” he said. |
| He said Tesco was looking at contingency plans with its suppliers and “if it came to it, we could take stockpiling of dry goods”, although this would be unlikely until after the busy Christmas trading period. “It really is still wait and see,” he said. | He said Tesco was looking at contingency plans with its suppliers and “if it came to it, we could take stockpiling of dry goods”, although this would be unlikely until after the busy Christmas trading period. “It really is still wait and see,” he said. |
| Total sales at the group rose nearly 13% to £28.3bn. Pretax profits rose 2% to £564m. | Total sales at the group rose nearly 13% to £28.3bn. Pretax profits rose 2% to £564m. |
| Tesco | Tesco |
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| Thailand | Thailand |
| Asia Pacific | Asia Pacific |
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