Tesco's Irish sales increase 9.7%

Supermarket chain Tesco increased sales in Ireland last year by 9.7 per cent to €2.7 billion.

As usual, the company did not release a profit figure for Ireland. On a European level, however, the company made a trading profit of £318 million from sales of £6.3 billion. This represented a profit margin of 5 per cent. If this were applied to the Irish company's performance it would suggest a trading profit of €136 million.

This is unlikely to take account of capital expenditure. The company said that more than €100 million was spent on store development in 2006.

Tesco's European figures include sales for the Czech Republic, Poland, Turkey, Hungary and Slovakia.

Tesco said about half of the €240.5 million increase in its Irish turnover was attributable to new store openings in New Ross, Clane, Tipperary, Nenagh and Rathcoole, and the refurbishment of supermarkets in Edenderry and Clonmel.

Tony Keohane, Tesco Ireland's chief executive, said the results represented "significant progress" but sounded a note of caution in relation to recent consumer sentiment.

"There are early signs that people are a bit more cautious. There's a bit more caution in terms of what they are spending. [ It is] In selected areas like wine. It's just a little bit."

Non-food sales now account for 25 per cent Tesco's overall revenues here. Demand for clothing is "increasing", while there was also growth in the sales of CDs, books and homeware.

The multiple introduced its own range of jewellery at its Clearwater hypermarket in Finglas last year and plans to expand this to its other hypermarkets.

Tesco's online home shopping sales also had a good year, with revenues increasing to €23.6 million in 2006 from €18.8 million a year earlier.

Tesco is set to open its 100th store in Ireland this year. The company said this was likely to be at either Cloonagh Cross in Limerick, Claremorris or Westport.

Wexford recently became the location for Tesco's 95th outlet here. New supermarkets are planned for Abbeyfeale and Celbridge, while two Express outlets, a convenience store format, will also open in 2007.

The company is also hoping to open a 10th petrol station here in Clonmel. Planning permission from the local authority is currently being appealed to An Bord Pleanála. Tesco has a 5-6 per cent share of the petrol market here, according to Mr Keohane.

Tesco opened its third distribution centre in Ireland this week at Donabate in north Dublin, costing more than €50 million.

Tesco said it was also now the biggest online distributor of motor insurance, with 9,000 policies in force. There are also 27,000 Tesco credit cards in circulation, while it has issued about 3,000 personal loans.

The multiple will launch a pre-paid mobile phone joint venture with O2 this year.

At a group level, Tesco's sales rose by 10.9 per cent to £46.6 billion while its pre-tax profit increased by 20.3 per cent to £2.6 billion.