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
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
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: Tax Assistant

Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...

Recruitment Genius: Outbound Sales Executive - OTE £25,000

£16000 - £25000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Java Developer / J2EE Developer - Watford - £45,000 - £47,000

£45000 - £47000 per annum + bonus + benefits: Ashdown Group: Java Developer / ...

Ashdown Group: Marketing Product Manager - (Financial Services) - SW London

£35000 - £38000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Day In a Page

Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

What the six wise men told Tony Blair

Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

25 years of The Independent on Sunday

The stories, the writers and the changes over the last quarter of a century
Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

Homeless Veterans appeal

As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

Smash hit go under the hammer

It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

The geeks who rocked the world

A new documentary looks back at origins of the computer-games industry
Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

Belle & Sebastian is taking a new direction

Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea
America: Land of the free, home of the political dynasty

America: Land of the free, home of the political dynasty

These days in the US things are pretty much stuck where they are, both in politics and society at large, says Rupert Cornwell
A graphic history of US civil rights – in comic book form

A graphic history of US civil rights – in comic book form

A veteran of the Fifties campaigns is inspiring a new generation of activists
Winston Churchill: the enigma of a British hero

Winston Churchill: the enigma of a British hero

A C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
Growing mussels: Precious freshwater shellfish are thriving in a unique green project

Growing mussels

Precious freshwater shellfish are thriving in a unique green project
Diana Krall: The jazz singer on being friends with Elton John, outer space and skiing in Dubai

Diana Krall interview

The jazz singer on being friends with Elton John, outer space and skiing in Dubai
Pinstriped for action: A glimpse of what the very rich man will be wearing this winter

Pinstriped for action

A glimpse of what the very rich man will be wearing this winter
Russell T Davies & Ben Cook: 'Our friendship flourished online. You can share some very revelatory moments at four in the morning…'

Russell T Davies & Ben Cook: How we met

'Our friendship flourished online. You can share some very revelatory moments at four in the morning…'
Bill Granger recipes: Our chef serves up his favourite Japanese dishes

Bill Granger's Japanese recipes

Stock up on mirin, soy and miso and you have the makings of everyday Japanese cuisine
Michael Calvin: How we need more Eric Cantonas to knock some sense into us

Michael Calvin's Last Word

How we need more Eric Cantonas to knock some sense into us