The UK’s most successful supermarket chain has posted record profits again in what it described as a challenging year for retail.
Tesco sold £41.8bn worth of goods across the world last year and made an underlying group profit of £2.251bn – a rise of 17%, and equivalent to the total income from farming in the UK last year.
Like-for-like sales in the UK were up 7.5% and food sales totalled £25.9bn even though prices in-store fell by 1.8% due to what the retailer calls “investment in price”.
The results were taken by farmers’ leaders and independent stores as further evidence of a Tesco monopoly. Gareth Vaughan, president of the Farmers Union of Wales said he had no objection to healthy profits as long as they did not come at the expense of suppliers.
“The only solution is to have a full OFT inquiry to examine the practices of the large supermarket chains with the aim of ensuring that the interests of all suppliers are fully protected.”
John Kinnaird, president of the NFU Scotland, said: “Despite having prided themselves on offering choice to their customers, the supermarkets’ continued squeeze on food processors and their farmer suppliers is threatening the future supply of quality Scottish and British produce; ironically at a time when demand for it has never been higher.”
But chief executive Sir Terry Leahy dismissed the inevitable accusations and said the chain was not in a dominant position.
He was reported as saying: “People are not worried about Tesco being dominant. They are worried about supermarkets doing a good job for them.”