Welcome to the new Independent website. We hope you enjoy it and we value your feedback. Please contact us here.

Tesco set to reveal a solid £3bn in profits

Tesco's chief executive, Sir Terry Leahy, is expected to reveal tomorrow that profits at the group tipped £3bn last year, despite the onset of the credit crunch and the recession.

The supermarket powerhouse, which posted profits of £2.8bn last year, is also expected to say that weekly sales, on average, exceeded more than £1bn during the unprecedented turmoil in the retail industry that has claimed hundreds of jobs and a number of household names, including Woolworths, earlier this year.

The results come as Tesco confirmed that it plans to double the number of its in-store phone shops over the next year.

It currently has around 50 phone shops in its larger Tesco Extra stores but this should rise to 100 by next March.

The expansion will throw down the gauntlet to more established rivals in the sector, such as Carphone Warehouse, as the UK’s biggest supermarket opens up more growth avenues in non-food areas.

In March, the firm also announced the expansion of its UK banking operation in Edinburgh, which will see the city become the headquarters for its finance arm.

City analysts issued a slew of positive notes on Tesco last week, claiming that concerns that “the empire is crumbling” had been overdone.

Sam Hart, an analyst at the brokers Charles Stanley, said: “Tesco will report another solid set of results, despite the challenging economic environment.”

The company has faced challenges from the likes of discounters such as Aldi and Lidl, prompting the launch of its own discount range last September, which impacted sales growth.

Analysts will, in particular, be keeping a keen eye on profits coming from the supermarket's financial services division, headed by Benny Higgins, the man who was unceremoniously ousted from HBOS in 2007 over botched mortgage pricing.

“Demand for Tesco's savings products is understood to have been strong in recent months as a result of turmoil among the high-street banks,” said Mr Hart. “Further details are expected to be provided on plans to introduce a new current account within the next 18 to 24 months.”

Tesco revealed last month that it was planning to open 30 bank branches in selected areas such as Blackpool and Coventry by the end of the year. John Kershaw, an analyst at Merrill Lynch, said that while Tesco was now a “more mature retail animal”, the supermarket would continue to grow and defend margins.

This article is from The Belfast Telegraph