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Every little helps ... Tesco tills now ring up £1 billion every week
Jonathan Prynn16 Apr 2009
THE Tesco juggernaut is set to crash through another symbolic barrier when its till takings exceed £1 billion a week for the first time.
City analysts expect the supermarket to announce that its turnover rose from just under £52 billion to around £54 billion last year, while profits are likely to pass £3 billion, also a new all-time high.
The chain reveals its 2008 financial results to shareholders on Tuesday.
The milestone comes just 30 years since Tesco's revenues first went above £1 billion a year. Symbolically, 1979 was also the year founder Sir Jack Cohen died.
Since then the company, sneered at by rivals as a "pile it high, sell it cheap" supplier, has sailed past Sainsbury's to become Britain's biggest retailer. It has also overtaken all but two foreign rivals to seal its status as the world's third largest shopping chain.
Tesco, whose slogan is Every Little Helps, now has 2,115 stores and employs more than 280,000 people in Britain alone. The chain has also colonised countries around the world with 476 branches in Thailand, 301 in Poland, 137 in South Korea and 125 in Japan.
But next week's results, which are likely to show that Tesco is riding out the recession in good shape -albeit at a slightly slower rate of growth - will revive claims that it is too dominant and has signed the death warrant for thousands of small local shops.
Helen Rimmer, spokeswoman for the Tescopoly campaign website, said: "Tesco's growth over the past 30 years has come at the expense of vibrant town centres, farmers and the environment.
"For three decades Tesco have bulldozed through weak planning laws, dictated terms and conditions to farmers, and been allowed to expand to the extent they now control over 30 per cent of the grocery market.
"The Government must stop the Tesco takeover with strong planning laws to protect town centres and new rules to ensure a fair deal for farmers." But admirers of the group said Tesco should be celebrated as a great national success story. One retail expert said: "If you are talking to the management of the very, very few retailers that are bigger than Tesco, I can tell you that Tesco is the one they look out for.
"It is the only retailer that Wal-Mart [the world's biggest super- market chain] is scared of." Commentators have put Tesco's extraordinary success down to factors such as its ability to spot new trends such as loyalty cards, move into non-food lines such as electronics and clothes, and ruthlessly exploiting planning laws.
Supermarket expert Judi Bevan, author of Trolley Wars, said: "Obviously Jack Cohen and even Ian MacLaurin (the previous chief executive) did not really foresee the time when Tesco would become a global brand.
"In the early Nineties the other supermarkets pulled back [from planning applications] and Tesco did not. Tesco was much braver than the others. Sainsbury's saw Tesco buying these huge sites and said 'how can they fill them all, and then of course they went into non-food and they did fill them.
"That was in the early Nineties recession and that was the foundation of their growth over the past decade."
Then and now ... 1979/2009
Profits - £37.7m/approx £3bn
Turnover - £1.24bn/approx £54bn
Number - 560/2,115 of stores
Tesco - 13.4%/30.4% market share
Independent - 31%/2.5% retailers' share
Big rivals - International, Fine Fare, Mac Markets/Aldi,Lidl,Morrisons
Innovations - Allowed credit card payment/Planning in-house bank branches
Reader views (14)
For a turnover of £54bn Tesco and a Net profit of £3bn this represents a very small 5.5% return on investment.
- Adam, Harrow, UK, 11/08/2009 12:06
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Can Tesco come to France please ?
- Tom, london, 11/08/2009 11:06
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I won't shop at Tesco, not because of their lack of ethics or morals but simply because the people who tend to shop in my local one are one step up from single celled organisms and make the experience so unpleasant as to be not worth the effort. I'll stick with Waitrose thanks.
- Bob, Cheam, 11/08/2009 11:06
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tesco is my father & mother
has anyone checked out the rip at our local shop.
i can feed,cloth and entertan my family because of our TESCO,long live TESCO
- Visakha, london, 11/08/2009 11:06
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Jack and Tessie Cohen would be proud of these results.
For those who think supermarkets destroy the competition,why do people buy at supermarkets and not the small shops?
Reason: One stop shopping and lower prices,which count alot in these difficult times and not so difficult times.
- David Nigel Braham, Milan Italy, 11/08/2009 11:06
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Stop shopping at Tesco everyone. They're despicable. I refuse to shop there. Unfortunately, many people don't have much of a choice as Tesco has put many small shops out of business. Eliminate and destroy the competition that's their motto. Every little (business) helps...
- Jb Hove, hove sussex uk, 11/08/2009 11:06
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Stop knocking Tesco, you have a choice you dont have to shop there or bank there. But unlike the Banks and the Uk government it is not a burden on the taxpayer. It also has to live with currency devaluation, Energy costs, business tax rates. But is working hard as a worldwide British company in these very difficult times. Nice to see something British still expanding, customer facing and profitable.
- Mike, France, 11/08/2009 11:06
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From the above figures, Tesco are running on a profit margin of around 5.5% Reuben, how exactly is that a 'rip off'?
But I suppose if we had things your way no-one would make any profit on anything. Which would be a bit of a shame, as then there'd be no taxes paid, no money for hospitals, schools etc, etc.
But you'd probably enjoy that, living in a cave and foraging for wild berries. Excuse me while I and the rest of the 'sheeple' go to work by day, and then shop in the supermarkets in the evening when we have the time...
- John, London, 11/08/2009 11:06
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Well done Tesco. 80% of thye shares are held by Pension Funds...ie, our pensions, so the more Tesco9 makes, the happier i'll be!
- Francis Salvesen, London UK, 11/08/2009 11:06
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John, London: You are obviously very happy with the present state of everything in the UK.
I reiterate: SHEEPLE.
You get exactly what you vote for.
- Reuben Camara, Morecambe UK, 11/08/2009 11:06
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So when are you planning to open supermarkets in Sydney to compete with the Woolworths / Coles duopoly?
- Douglas, Sydney Australia, 11/08/2009 11:06
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Its already there Tom, at Cite Europe by the chunnel exit.
But why do you want rubbish food products in France ?
- Kedge, marlboro wilts, 11/08/2009 11:06
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GBP3,000,000,000 TESCO PROFIT IN ONE YEAR.
GBP3,000,000,000 RIPPED-OFF THE UK PUBLIC EVERY YEAR.
RIP-OFF UK.
NO WONDER THE UK IS BANKRUPT - WHEN SHEEPLE GIVE ALL THEIR CASH TO THE LIKES OF TESCO.
- Reuben Camara, Morecambe UK, 11/08/2009 11:06
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Tesco and other profitable companys should not rely on taxpayers to subsidise their low wages they pay.
Most people who work for tesco earn just over £6 per hour.
That is not enough to live in this country especially if you are renting a house and rely on one wage.
So these low paid claim additional benefits paid by us the taxpayer which is one of the reasons they made £2 billion in profit last year.
As for competition between tesco asda and other big stores, it does not exist, you only have to see the way food prices have increased and then they delude shoppers with offers.
And they are all doing exactly the same
- C Crofts, BLACKPOOL ENGLAND, 11/08/2009 11:06
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