Tesco keeps the tills ringing

Tesco reported its latest quarterly results this morning, and Sir Terry Leahy's company continues to be a money-making machine. If there has indeed been a marked slow-down in consumer spending, as reported yesterday, nobody seems to have told Tesco's customers...

The retail giant confirmed its pre-eminence by posting a sales increase of 11.8% for the third quarter, up from 10.3% last year. That’s a remarkable jump for a company of Tesco’s size, particularly since it’s operating in a saturated home market.

However, today’s figures show that international revenues are becoming Tesco’s biggest growth driver – explaining why Sir Terry is so keen to crack the US. Overseas sales were up 25.7%, thanks largely to a 29% increase in Asian revenues. It now plans to open another 7m sq ft of retail space overseas this year, with a particular focus on the US – as we wrote yesterday, Tesco hopes its Fresh & Easy concept could eventually become a 1000-store chain.

Growth in its core UK business, which accounts for about three-quarters of its revenues, was slightly less stellar but still striking. Sales were up by 7.6%, thanks partly to a raft of new retail space and the strong performance of its various online operations. Like-for-like sales were up 4.1%, which is lower than last year’s figure of 5.6% - the drop has attracted some negative comment from analysts, but frankly, this seems a bit churlish in light of the overall picture.

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