Tesco has reported its full year financial results for the 52 weeks ended February 25th 2012. Sales were up 5.9 per cent excluding petrol for the period to £72 billion.
Group trading profit was up 1.3 per cent to £3.8 billion, but the UK profit fell one per cent to £2.5 billion.
As a result of the fall in UK profit, the retailer is implementing a UK plan. 8,000 new staff will be employed in existing store; the rate of new store openings will reduce by 38 per cent, with a focus on improving existing outlets; and a new Tesco Direct website will be launched.
Tesco says the investment will focus on six key elements:
1. Service and staff
2. Stores and formats
3. Price and value
4. Range and quality
5. Brand and marketing
6. Clicks and bricks
Philip Clarke, chief executive, commented: "The last few months have seen us drive a faster pace of change in Tesco, particularly in the UK, reflecting our determined focus on the immediate objectives for the Group that were set out last April.
"This pace of change will accelerate further over the next twelve months. We have already taken important steps to renew and strengthen management in the UK and across the Group in key areas, to support this programme of change.
"Whilst our international business is delivering excellent growth, contributing £1.1 billion of profit to the Group, we fully recognise that we need to raise our game in the UK.
"As a result, we are committing over £1 billion to make the UK shopping trip better for customers: more staff giving improved service in-store; refreshed stores that are better and easier places to shop; lower prices and even more value from an improved product range. As we improve the shopping trip for our customers, it will follow that our sales growth and financial performance will improve too.
"These are decisive steps and this cost investment – as we have already announced – will constrain our near-term profitability. We are also focusing our lower overall capital expenditure more into our existing stores and in building our online businesses.
"We are adapting our UK capital plans so that we have the right store base for the future, to underpin the returns that create long term value for our shareholders. Together these steps are the right things to do both to improve the shopping trip for customers and to secure a return to profitable growth in the UK."