IT underpins growth at Tesco, chief executive says

Information technology continues to underpin growth at Tesco, the UK's largest retailer, which has a growing international presence.

Information technology continues to underpin growth at Tesco, the UK's largest retailer, which has a growing international presence.

Chief executive Terry Leahy has reported that internet sales now contribute 4.2% of Tesco's group profits and 3.1% of sales. Profits from Tesco's online foods sales were up almost 50% on sales that grew 31% and a customer base of more than one million active users that was up 20%.

Tesco's banking division, whose 26 products attracted 1.7 million new customers, saw a 50% rise in online customers and a 20% rise in online business transacted in the year. "Most products are available online, where more than 50% of new sales are now made, after a 20% rise in internet business in the year," Leahy said.

Tesco Telecoms' joint venture with O2 in mobile phones moved into profit on the back of a 39% rise in sales to a customer base that grew 250,000 last year, he said.

Leahy said 22.5 million fewer customers had to queue, thanks to new thermal imaging technology that alerted store managers to open more tills when the queue was longer than one person. This was helped by new checkout technology that was faster, more accurate and easier to use, he said.

He added that on-shelf availability of products, as measured by picking lists from tesco.com, had improved again. "More customers are able to buy everything they want when they shop at Tesco," Leahy said.

Tesco's preliminary results showed an 11.1% increase in sale to almost £52bn, with underlying pretax profits up 11.8% to £2.85bn.

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