Most people know something about Tesco. After all, we are the UK's largest grocer and we've been serving customers for the best part of a century. What you might not know, is that Tesco is also the world's third largest grocery retailer with operations in 12 international markets, employing over 440,000 people and serving millions of customers every week.
We're not simply about providing great quality food at affordable prices.
We provide more choice than ever to more customers, whether it's through our expanding international operations, innovative retailing services or our growing non-food offer. It doesn't matter how people choose to shop with us or what they choose to buy, our core purpose remains the same - to create value for customers to earn their lifetime loyalty.
We are also playing our part in tackling some of the social and environmental challenges we all face by putting community at the heart of what we do.
From carrots to computers, from banking to broadband, from Shanghai to San Diego. We are...
...more than
the weekly shop
This has been another exciting year for Tesco. There have been some big developments - such as entry into the US - but there have also been many small improvements that, added together, mean our offer for customers is better than ever. We're playing a more active role in the communities we serve, more of our people are being developed and our shareholders continue to benefit from our success.
It's the many small improvements that are behind our Every Little Helps philosophy. Whether it's helping our customers to spend less, trying to ensure that they don't queue at the checkouts or making sure that they can buy that extra product they've been looking for, Every Little Helps can become a great deal when everyone pulls in the same direction.
Key hightlights
- 2,115 stores
- 280,373 staff
In the UK, Tesco coped well with unseasonal summer weather, recovering competitors and a deteriorating non-food market, particularly in the second half, to deliver solid progress in the year by investing in improving the shopping trip for customers. UK sales grew by 6.7% in the year to £37.9 billion. Both customer numbers and spend per visit increased.
Key hightlights
- 746 stores
- 83,705 staff
In Central Europe we are emerging from a long period of economic instability and intense competition as one of the clear winners across the region. The prospects for improving returns, as we continue to build our market positions, and benefit from increased scale, regional economies and improved infrastructure, have never been better.
Key hightlights
- 814 stores
- 77,554 staff
We have delivered a very strong performance in Asia, despite retail markets in our two largest countries - South Korea and Thailand - remaining subdued. We are now market leader in Malaysia, just seven years after we entered the country and we are accelerating growth and investment in China now that we have full management control of our business there.
Key hightlights
- 53 stores
- 669 staff
We are very encouraged by the start Fresh & Easy has made. The first stores opened only in November and we now have over 50 trading. The early response of customers to our offer has surpassed our expectations - with our research regularly confirming that they like the quality and freshness of our ranges, as well as the prices and the convenient locations of the stores.
11.1%
Group sales (including VAT)
11.8%
Underlying Group profit
before tax
5.7%
Group profit before tax
(15.3% growth excluding last year's exceptional items;
principally the Pensions A-Day credit)
20.8%
Underlying diluted earnings
per share*
14.2%
Diluted earnings per share
13.1%
Dividend per share
| 2008 | 2007 | |
|---|---|---|
| Group sales (£m) (including value added tax) | 51,773 | 46,611 |
| Group revenue (£m) (excluding value added tax) | 47,298 | 42,641 |
| Underlying Group profit before tax (£m)† | 2,846 | 2,545 |
| Group profit before tax (£m) | 2,803 | 2,653 |
| Underlying diluted earnings per share (p) | 27.02 | 22.36 |
| Diluted earnings per share (p) | 26.61 | 23.31 |
| Dividend per share (p) | 10.90 | 9.64 |
| Group enterprise value (£m) (market capitalisation plus net debt) | 37,656 | 40,469 |
| Return on capital employed | 12.9%§ | 12.6%‡ |
| * | 13.1% growth on a normalised 28.9% tax rate. |
|---|---|
| † | Adjusted for IAS 32, IAS 39, the net difference between the IAS 19 Income Statement charge and 'normal' cash contributions for pensions and IAS 17 'Leases' - impact of annual uplifts in rent and rent-free periods. In 2007 an adjustment was also made for Pensions adjustment - Finance Act 2006 and impairment of the Gerrards Cross site. |
| § | Using a 'normalised' tax rate before start-up costs in the US and Tesco Direct, and excludes the impact of foreign exchange in equity and our acquisition of a majority share of Dobbies. |
| ‡ | Including the one-off gain from Pensions A-Day, ROCE in 2007 was 13.6%. |
Core UK
The UK is our biggest market and the core of our business. We aim to provide all our customers with excellent value and choice. This year recovering competitors and cautious consumers have made growth harder to come by, but with strong productivity, mix and margin control, we delivered good results.
Community
We added Community as the fifth part to our strategy this year. As modern economies may have to operate on about a fifth of the carbon they do today, we believe in the future it may not be a choice to be green, but that we can't grow unless we're green.
International
Tesco is an international retailer and wherever we operate we focus on giving local customers what theywant. Our overseas business has had an excellent year, contributing over half of the growth in Group profit in the year.
Retailing Services
Tesco has followed its customers into the growing world of retailing services, aiming to bring simplicity and value to complex markets. Services have performed well this year, with sales in our online businesses up over 30%, Tesco Mobile moving into profitability and Tesco Personal Finance getting back to a faster rate of growth.
Non-Food
Our aim is to be as strong in non-food as in food. This means offering the same great quality, range, price and service for our customers as we do in our food business. Our Group non-food sales have grown by 12% to £11.8 billion this year, accounting for 23% of our total sales.
