April 18 2007

Tesco.com sales increase nearly 30%

Tesco continues its growth as annual profits hit £2.55 billion, up 13.2% on last year. Its online operations recorded even higher growth rates with Tesco.com sales up by 29.2%, to £1,226m, and profit, before the start-up costs associated with Tesco Direct also rising strongly - by 48.5% to £83.4m.

The online grocery and wine business now has over 850,000 regular customers and more than 250,000 orders a week. Customer response to Tesco Direct "so far has been very encouraging".

The company has continued to make good progress with all four parts of its expansion strategy:

Maintain a strong core UK business

Become an international retailer

Develop retailing services

Be as strong in non-food as in food (non-food sales, excluding petrol, rose by 25%)

It is in this non-food area that its online operations have been expanding and the launch of Tesco Direct desks in supermarkets are expected to strengthen its non-food sales.

"Tesco is investing for the future and delivering today. These results demonstrate that we have again made good progress across the Group, whilst making significant start-up investment in new businesses and coping well with challenging conditions in some markets. We are pleased with the early performance from Tesco Direct and our plans to open stores in the United States later this year are on track," commented Chief Executive Terry Leahy.

Emma Herrod