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SUPERMARKET BEHEMOTH TESCO has said it is closing its stores in the United States and exiting the country as the company’s pre-tax profits fell by 51.5 per cent in one year.
It is believed to be the first time since the early 1990s that the company has seen a drop in its annual profits, with pre-tax profits falling to £1.96 billion.
The cost of leaving the United States market is estimated at £1 billion.
Overall Tesco recorded an underlying profit before tax of £3.45 billion (€4.02 billion) – a drop of 14.5 per cent per cent – in its preliminary results for the year ending in February 2013.
The biggest drop came in Europe, where the company saw a drop in profits of 38 per cent. The UK, which accounts for the vast majority of Tesco’s profits at more than £2.2 billion, saw a drop of 8.3 per cent.
Growth in Ireland grew slightly in the first half of the year but dropped in the second half, leading to an overall drop in growth of 0.3 per cent.
Tesco noted one of the biggest problems in Ireland is that “after a period of relative calm following its early exposure to the crisis, customers are facing a further round of austerity measures which has further impacted spending.”
Overall Tesco had sales of £72.3 billion, with sales growth of 1.3 per cent.
Tesco chief executive Philip Clarke said the announcements were the “natural consequences of the strategic changes” which began more than one year ago to change how Tesco delivers its service in a major restructuring.
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I’m spending more than ever on food… And less of it at Tesco. I’m sorry but between the water plumped chicken that shrinks to a third of the size in a gelatinous goop, the horsemeat beef, the increasing markup on healthier, lean products and nothing but offers on various combinations of corn, soy, sugar junk….
You’re less of a fresh food store and more a purveyor of crap that’s slowly poisoning us
here here!!
As a prime example. I used to buy lean turkey mince in tesco, it was €4 for 500g and you got two for €6, pretty good price. I’m not copmplaining…
I believe they notice pretty fast that people who are buying healthy food the price isn’t the first consideration on their minds and quickly start price skimming. So now it’s €4.99 and never on special offer anymore. Meanwhile M&S sell the same thing for €3.50
Every little helps… Tesco’s coporate profits
thank you Andrew at €3.50 i,ll be having some of that
Isn’t it amamzing we can tell an awful lot about Tesco’s worldwide operation in terms of profits yet the Irish branch of their operation is scant on detail.
The Curse of Clontarf awaits you Tesco methinks !
They don’t release the Irish profits.
You can bet that they are making serious money here and creaming the punters , sure all they have to do is add 30% on to the prices in UK and the Irish public simply pay and say everything is grand.
They may not release their figures but “creaming the punters”? I don’t think so. I always find they are much cheaper than Dunnes. They have more offers, better range, much friendlier staff and their Value range is much better quality than the St. Bernard’s range. I would love to shop at Dunnes but they seem to me they aren’t bothered competing.
Ya but the quality of the food is superior in dunnes
The staff in Tesco are not friendlier than those of Dunnes, and the prices are actually better in Dunnes on considerably more products…
Fully agree with you David. I’m not here to promote Tesco as I used to resist shopping there and would prefer to shop Irish but Dunnes seem to be moving towards Superquinn pricing. Tesco are CONSIDERABLY cheaper than Dunnes and their own range / everyday value products are considerably cheaper cheaper than Dunnes and better quality. Most times they can be 50% cheaper than Dunnes. They always have a huge amount of buy one get on free offers on too. Not to mention their wine which is nearly always on offer and regularly do their buy 6 and get a further 25% off your bill, not vouchers..
Trust me in this day and age where we are watching every cent Dunnes are ripping off their own..
Agreed dunnes here are terrible compared to tesco. Supervalu even worse price wise (except on meats for some reason)
Don’t mind Dunnes Tesco or Supervalu, Aldi is the way of the future :)
Completely agree. Tesco offers much better value than Dunnes and they also offer a far greater selection of own-brand products which are of a good decent quality. Dunnes is over-priced and the quality is not near as good. I definitely notice a difference in my bill, with far more offers available in Tesco, plus the fact you get clubcard points for your petrol – it’s all going back into saving money on your shopping bills! But in saying that, I have noticed in recent months that prices have increased ever so slightly in Tesco, I find it’s best to split a weekly/monthly shop between Lidl and Tesco, saves money in the long run!
As a farmer I refuse to enter the doors of either Tesco, Lidl, Aldi or Dunnes. A plague on all their houses as far as I’m concerned .
Tesco do sell alot of irish products in Ireland and the UK supporting thousands of jobs.
Matt ; I read something once that for every job created by a conglomerate supermarket that opens 9 are lost in the small shops and businesses in the local area; look at what cheap alcohol has done to all the jobs in our puns for example !
Furthermore ;as a farmer the buying power of the supermarket chains have been attributed some blame in the horsemeat scandal which has directly affected my income !
Finally; irish beef is the cheapest beef in the world despite having to compete directly with beef from brazil that is not tested for T.B. ;
pubs not puns !
Expensive pints are what have decimated bar jobs, not cheap offie. Different market.
I have to educate you Matt. Tesco on the surface seem to be creating jobs. But in reality they are closing local businesses down. Most of their product comes from abroad (uk). That’s including fresh meats and dairy products. They are costing local people their jobs driving farmers into closure and poverty,and that’s just on the front line. Their products are delivered by 40ft trucks that are transported by a British transport company, driven by British drivers. All of the maintenance on these vehicles are all done in the uk. Taxed in the uk and refuelled in the uk. Tesco are like parasites that feed off other businesses, our people and our system. They have ruined their country of origin and are hated their too as a result. The sooner Irish people realise this the better off we will all be. Shop Irish ,keep it local ,save jobs.
The way Lidl & Aldi are increasing their market share here it’s no surprise they are down here.
More proof that Austerity is removing spending in the economy. Austerity doesn’t work
I wouldn’t use tesco as the barometer of whether austerity is working or not! In the last few years I’ve stopped shopping there altogether! When people realise that their food is crap they’ll follow suit! I’ve little good to say about Tesco!
Did you all read this Tesco related article;
Tesco, profit before people.
Ah sure it’s all about the profits. We’re all feeling the pinch but have no choice but to struggle on. I don’t shop often in tescos due to reason mentioned above. I had it out once with a manager asking why the UK price £5 but €10 and all I got for my troubles was a one shouldered shrug from the gum chewing lackey manager. Took to my heels and went straight to Aldi.
However even Aldi is more expensive than in the UK as when I lived in London I could live off £10 for a week. Waffles and beans!
That’s not living. That’s existing.
Out of interest, do you drink or smoke or go out? How much a week would you spend on these?
There is also no point arguing with staff be it managers or whoever about any of the prices. They are all set centrally from the head office so a shrug I’d a fair response.
It also has to do with the fact that rental prices and utilities are very expensive in Ireland. Companies aren’t charities, they have to make a profit otherwise they will go out of business. So they pass the extra costs on to the consumer.
Food in Aldi is cheaper in Ireland to England. The price you pay in euros we pay in pounds. Alcohol is cheaper in England compared to Ireland.
They don’t need BILLIONS in profit!!! You do realize, right, that when a company releases their profits numbers that’s after ALL of the expenses are paid? Including salaries and wages. Then you wonder why people are suffering. I don’t want to hear a word about companies not having the money to hire people…
Mike, you are correct that the figures are those released after all of their operating expenses have been paid. That doesn’t mean all of their expenses have been. They still owe money to the tax man for both operating and for the gross profit they have made.
Then they owe money to the shareholders. They may decide to retain £1billion to pay for the costs of exiting the US market. Then they may use more of that money to either pay off debts or to finance more expansions (thus creating jobs) on top of paying those who invested some money.
A lot of companies use a good portion of their profits to pay for expansions and create job opportunities as well as paying their shareholders.
Interesting to hear people say food is better in dunnes FAO all food manufacturing plants here do same food for both tesco and dunnes…….just marketed didderently and different packaging
Rubbish staff in my local Tesco, less selection than in UK Tesco in Irish stores and cost about 25% more. See ya in Aldi!
My experience is that you have to be prepared to be price-savvy and shop around and not just ‘zombie-shop’ to the same store every time. All of the stores, Tesco included, have their positives and negatives.
Sometimes the best way is to just use a combination of 2 or 3 different stores and you pick up the best stuff at the best price that way.
Where ever you shop though, buy as much Irish-produced stuff as you can. We seriously need to keep the jobs going and a lot of small food companies are heavily dependent on the domestic market and it’s not like it’s a hardship, we’ve some really excellent food products. They also tend to be the kind of places that are creating real jobs in local communities all over the country.
Also, if a small food company has some success in the domestic market, it often means that they can grow internationally.
Tesco are falling behind with online shopping too. Well, thats what I notice over here anyway. Ocado and Sainburys are leapfrogging them here as they have better delivery times and more helpful staff.
Tesco online is a joke. The back end of a Cortina welded onto the front end of a Corrolla. Staff wandering round the store picking things off the shelf for you (if they’re even in stock) – what year is this?
How else do you think your shopping gets to you?? It doesnt jump off the shelf by itself!!
How do you think Amazon, a real online business, does it?
Don’t know how people buy from tesco’s, there prices and products are bad. The shelf life of most of the quick meals, fresh fruit, dairy and baked goods is a joke, use by that day or its good for the bin. I gave up the whole support Irish nonsense with dunnes, supervalue etc and stuck to lidl and aldi and am happy with the product and price.
Increase wages by 20% for those earning less than €35000. Boost confidence, increase employment through increased consumer spending. Reduce debt burdens. It will increase revenues through VAT and cut social welfare payments. Employers may have extra costs but at least they will see the value through a more productive workforce and increased custom. This would be better than simply taxing people more.
Legislate for that!
Hahah are you f**king nuts! You lost me at increase wages by 20% for under 35k. Most employers would all cease trading tomorrow if that happened. By the way I’m on well under 35k per annum but i’m living in the real world.
Had a little laugh at that myself, im way below that pay bracket, id take a 5% if they offered never mind 20%
Have you an even basic understanding of economics Stephen? Raise wages by 20% and prices go up 20% – (its called’ inflation’) where do you think employers are going to get the extra %20 from? The magic money tree?
what school of economics did you go to? jim corr was teaching was he?
Raising wages by x% does not always equate to corresponding price increase. Did prices fall when the minimum wage was reduced to €7.65? Or increase by a corresponding amount when it was restored to €8.65?
The subject matter of the topic is that Tesco profits have fallen by 51% to a mere €1.9bn. That is the hub of the issue. Many large corporations have vast fortunes that they are not using for investment. They are, understandably, fearful of money going down the drain. Similarly the argument from high earners is that they cannot pay anymore in taxes – they too, understandably, don’t want their own money being used to fill a black hole in the government finances.
But if all employers were compelled, through legislation, to pay higher wages then individually they would p*ssed off. But at a macro level what would happen is increased consumer spending. Thereby, increasing employment, increasing revenues etc.
This economic crisis was not caused by wage inflation. For twenty years social partnership delivered pay increases relative to inflation. This allowed for profits to rocket. The money is there, it’s just in the hands of the few. The wont let it go voluntarily so compel them through legislation. They might baulk at the idea, but ultimately it will restore the country’s finances.
I shop in superquinn and the quality of service and product (meat and fruit being the biggest difference) is better than aldi, dunnes and Tesco. I’ve also noticed over the past 2 weeks they’ve taken down all the signs saying “prices checked vs Tesco” and they’ve replaced them with “prices checked vs Aldi”. Tesco is an awful place to shop…
Tesco and Dunnes seem to be bit-by-bit turning into giant sweet stores.Almost every isle has buscuits, bars, crisps or fizzy drink “on offer”. No wonder the nation is turning into a pack of porkies.
On every level it is obvious austerity isn’t and won’t work. Yet it is the only game in town. The real story here is the collapse of capitalism. We will spend the next 20 years waiting for another economic system to take hold or perhaps chaos instead. Should be interesting
Capitalism profit before people
Z
Most of Tesco’s food is poor quality. Much better quality food in Aldi and cheaper than Tesco.
Can’t beat superquinn!
mucho espensivo
@ Stephen – So you want all employers to give say a person on 35K a pay bump of 6K? That is nuts.
Sure why not go the whole hog and have everyone on the same wage regardless of the job!
Buy Irish anyway
Every little helps!
Great now get them out of Ireland too
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