MacLaurin bows out at Tesco with record profit

Lord MacLaurin, the Tesco chairman who retires in June, delivered his farewell set of results at the supermarket group yesterday, bowing out with record profits, the shares close to their all-time high and with the company still in pole position as the nation's leading grocer.

Lord MacLaurin, who joined the company as a management trainee in 1959, said he would be sad to leave after nearly 40 years but would remain busy with his role as the England cricket supremo and his non-executive directorships.

"I'll be sad to leave as it has been my baby. We created it when we came out of Green Shield Stamps in 1977. The aim then was to be the number one. Back then, not too many people gave us much of a chance. I'm very proud of what we've done with what was then a pretty mediocre company.

"But one of the skills is knowing when to leave. I've spent a lot of time bringing people on in the business. And I shall be keeping a fatherly eye on my proteges."

He said that in addition to Terry Leahy, who moved up to the chief executive role in February, there would be other board appointments later this year. Analysts expect these may be in distribution, with another position created to run the growing European operations.

Commenting on Lord MacLaurin's impending departure, deputy chairman David Reid said: "He's a charismatic character and people will miss that. But Tesco is not managed like a Thatcherite cabinet. Decisions are made collectively."

Lord MacLaurin, who turned 60 earlier this year, will step down at Tesco's annual meeting on 4 June.

When he was appointed managing director in 1973 Tesco was a family-run organisation with a "pile it high, sell it cheap" philosophy. But in 1977 Lord MacLaurin won a key battle with the Cohen family in persuading the board to abandon the downmarket and dated Green Shield Stamps.

Tesco gradually started to re-invent itself as the friend of the middle classes and a genuine rival to Sainsbury with brighter stores, stocking higher quality goods at keen prices in increasingly larger, out-of-town locations.

The expansion continued in the 1980s until in the last few years Tesco began to draw close to and later overtake Sainsbury.

The strong performance continued yesterday with the group's results for the year to 22 February showing a 10 per cent increase in pre-tax profit to pounds 750m.

Margins fell 0.4 percentage points largely due to the petrol price war which has now eased.

Like-for-like sales increased by 7.5 per cent and are running 6 per cent higher since the year-end.

However, the company said that inflation fell from 3 to 1 per cent making the industry more competitive.

The strong sales growth means Tesco maintains its market lead over Sainsbury. According to figures from the Institute of Grocery Distribution, Tesco's UK market share is 14 per cent compared with Sainsbury's 12 per cent.

Tesco will this year open eight superstores, 12 compact stores and four city centre Metro stores. However, it will open only two branches of Tesco Express, the petrol stations with convenience stores attached, after the impact of last year's petrol price war.

"It was a trial and we've put Express on the back-burner for now," Lord MacLaurin said. He said pizza bars and hot food had been added to several stores with good results. These will be added to new stores and refits as the company feels the hot food and take-out market has growth. potential. "We are doing cooked chickens and pizzas. We could do hot pies and burgers. There is huge potential."

The Items range of Tesco clothing is also to be expanded as it follows Asda with its successful George range.

Though Tesco is expanding in central Europe and Ireland with the recent purchase of the Quinnsworth stores, Lord MacLaurin said there was still room for growth in Britain. "We have flexible formats with the superstores, compacts and Metros and that will help us continue to grow." Tesco has signed up 9.5 million members to its loyalty card and 190,000 to its ClubCard Plus deposit account scheme. The push into financial services will continue with a new credit card and more new products will follow.

Tesco denied any interest in the Littlewoods high street stores, recently put up for sale. However, it said it could become involved in the sale of gas and electricity. Group sales were up 15 per cent at pounds 14.98bn. The dividend was raised 10 per cent to 7.8p. Tesco shares closed 11.5p higher at 364p.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
Arts and Entertainment
Larry David and Rosie Perez in ‘Fish in the Dark’
theatreReview: Had Fish in the Dark been penned by a civilian it would have barely got a reading, let alone £10m advance sales
News
Details of the self-cleaning coating were published last night in the journal Science
science
News
Approved Food sell products past their sell-by dates at discounted prices
i100
News
Life-changing: Simone de Beauvoir in 1947, two years before she wrote 'The Second Sex', credited as the starting point of second wave feminism
peopleHer seminal feminist polemic, The Second Sex, has been published in short-form to mark International Women's Day
News
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Evening Administrator

£8 per hour: Recruitment Genius: This Pension Specialist was established early...

Guru Careers: Executive Assistant / PA

£30 - 35k + Bonus & Benefits: Guru Careers: We are seeking an Executive Assist...

Ashdown Group: Graduate Application Support Analyst

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Reach Volunteering: External Finance Trustee Needed!

Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...

Day In a Page

Homeless Veterans campaign: Donations hit record-breaking £1m target after £300,000 gift from Lloyds Bank

Homeless Veterans campaign

Donations hit record-breaking £1m target after huge gift from Lloyds Bank
Flight MH370 a year on: Lost without a trace – but the search goes on

Lost without a trace

But, a year on, the search continues for Flight MH370
Germany's spymasters left red-faced after thieves break into brand new secret service HQ and steal taps

Germany's spy HQ springs a leak

Thieves break into new €1.5bn complex... to steal taps
International Women's Day 2015: Celebrating the whirlwind wit of Simone de Beauvoir

Whirlwind wit of Simone de Beauvoir

Simone de Beauvoir's seminal feminist polemic, 'The Second Sex', has been published in short-form for International Women's Day
Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Why would I want to employ someone I’d be happy to have as my boss, asks Simon Kelner
Confessions of a planespotter: With three Britons under arrest in the UAE, the perils have never been more apparent

Confessions of a planespotter

With three Britons under arrest in the UAE, the perils have never been more apparent. Sam Masters explains the appeal
Russia's gulag museum 'makes no mention' of Stalin's atrocities

Russia's gulag museum

Ministry of Culture-run site 'makes no mention' of Stalin's atrocities
The big fresh food con: Alarming truth behind the chocolate muffin that won't decay

The big fresh food con

Joanna Blythman reveals the alarming truth behind the chocolate muffin that won't decay
Virginia Ironside was my landlady: What is it like to live with an agony aunt on call 24/7?

Virginia Ironside was my landlady

Tim Willis reveals what it's like to live with an agony aunt on call 24/7
Paris Fashion Week 2015: The wit and wisdom of Manish Arora's exercise in high camp

Paris Fashion Week 2015

The wit and wisdom of Manish Arora's exercise in high camp
8 best workout DVDs

8 best workout DVDs

If your 'New Year new you' regime hasn’t lasted beyond February, why not try working out from home?
Paul Scholes column: I don't believe Jonny Evans was spitting at Papiss Cissé. It was a reflex. But what the Newcastle striker did next was horrible

Paul Scholes column

I don't believe Evans was spitting at Cissé. It was a reflex. But what the Newcastle striker did next was horrible
Miguel Layun interview: From the Azteca to Vicarage Road with a million followers

From the Azteca to Vicarage Road with a million followers

Miguel Layun is a star in Mexico where he was criticised for leaving to join Watford. But he says he sees the bigger picture
Frank Warren column: Amir Khan ready to meet winner of Floyd Mayweather v Manny Pacquiao

Khan ready to meet winner of Mayweather v Pacquiao

The Bolton fighter is unlikely to take on Kell Brook with two superstar opponents on the horizon, says Frank Warren
War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

Baghdad fights to win back Tikrit from Isis – but then what?

Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable