Tesco’s Irish business made a profit of €108m last year

Tesco’s Irish retail business made a profit of €108 million last year on revenues of just under €3 billion, according to the first set of statutory accounts that the grocer has filed here.

This equated to a profit of just more than €2 million a week for the supermarket group, although this was down from a €125 million surplus recorded in the previous 12 months. Tesco paid €22.6 million in corporation tax in the year to the end of February 2023, up from €20.8 million a year earlier.

The reduction in profits is believed to be due in part to an investment in price promotions amid the cost-of-living crisis and an increase in its overheads. Its cost of sales rose by €118 million while its administration expenses increased by €40 million.

The company’s operating profit margin reduced to 4 per cent, down from 4.9 per cent a year earlier.

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The accounts reveal that Tesco Ireland Ltd paid a dividend of €119 million to its British parent in February this year, following up a €60 million payment made in 2022.

Tesco Ireland’s accounts also reveal that it paid €80.2 million in cash in June 2022 to acquire the Joyce supermarket group in Galway. It acquired nine stores as part of the transaction.

In addition to the Joyce stores, Tesco also opened four express outlets during the year to bring its network to 166.

The retailer’s turnover rose by 4.8 per cent year on year with its like-for-like sales up 3.3 per cent for the period. Sales from members of its Clubcard loyalty programme amounted to 77 per cent of its turnover while its general merchandise and clothing business achieved like-for-like sales of 5.4 per cent.

The accounts show that Tesco Ireland employed 12,913 staff during the year and paid €369.6 million in wages and salaries. Remuneration for the retailer’s five directors amounted to just under €3 million.

It took an impairment charge of €21.4 million during the year on its retail stores.

In a statement, Natasha Adams, Tesco Ireland’s chief executive, said it published statutory accounts here for the first time to “address transparency in our business”.

“We benefit from economies of scale and investment from Tesco Group, which mean the operating costs of our business are lower than a typical business of our scale and size,” she said. “In a challenging year for many customers, this has allowed us to invest in keeping the cost of the weekly shop as affordable as possible, working closely alongside our supplier partners.”

Ms Adams added that Tesco, as a group, buys €1.6 billion a year of products from the Irish agribusiness sector. Tesco is the biggest supermarket group in Ireland alongside Dunnes Stores, with a 22.6 per cent market share.